Centre-Bengal ties may hold key to investments

Though the mandate is seen largely an outcome of Banerjee’s welfare schemes, she has promised to industrialise at a faster pace, or so read the manifesto.

Congratulations to the Tigress of India @MamataOfficial — it’s been a pleasure to have invested in Bengal during your tenure and I commit to doing more in Bengal through @TheJSWGroup — looking forward to growing our presence in Bengal under your leadership,” tweeted Parth Jindal, managing director, JSW Cement.

The endorsement and commitment came on the eve of Mamata Banerjee taking oath as West Bengal chief minister for the third time. Banerjee was sworn in on Wednesday.

JSW Cement has a 2.4 million tonne (mt) cement plant at Salboni in West Medinipur district, which will increase its production to 3.6 mt by August-end.

By 2025, the company plans to take its capacity to 25 mt with a special focus on the eastern region, including Odisha.

But as Banerjee embarks on a new innings, the question uppermost on the business community’s mind is whether Mamata 3.0 will focus more on investments.

Though the mandate is seen largely an outcome of Banerjee’s welfare schemes, she has promised to industrialise at a faster pace, or so read the manifesto.

It said that 2,000 big industrial units would be added to the existing base of 10,000 units over the next five years.

And steps would be taken to get IT and BT companies — both industrial and foreign — to set up businesses in Bengal.

It expected the state would attract about Rs 5 trillion of new investments over five years.

The past few months saw a high-octane election campaign in Bengal, where Banerjee’s policies, especially with respect to industry, came under fire from Opposition parties.

It’s not that projects have not come in.

The proposed Bengal Silicon Valley on 200 acres of land at Newtown has seen interest from a number of companies with 79 acres allotted to 24 IT companies, including TCS (for a second campus), Reliance Jio (for a development centre) and Airtel (for a data centre).

Infosys and Wipro (for its second centre) have been given land in Rajarhat.

Then there are a bunch of cement companies (apart from JSW Cement) that have set up units.

And an expression of interest for a proposed seaport at Tajpur was floated in December 2020.

But data from the Department of Promotion of Industry and Internal Trade (DPIIT) shows West Bengal is lagging some states.

In 2020, 27 industrial entrepreneur memorandums (IEMs) were filed with a proposed investment of Rs 9,552 crore.

The amount was Rs 1.62 trillion for Karnataka, Rs 46,141 crore for Gujarat, and Rs 44,188 crore for Maharashtra. Tamil Nadu was lower at Rs 6,807 crore.

The proposed investment figures for West Bengal in 2018 was Rs 4,722 crore and in 2019, it was Rs 5,844 crore.

According to government estimates, however, the last five editions of its annual investment summit — the Bengal Global Business Summit (BGBS) — translated into investment proposals of around Rs 12.32 trillion, of which 40-50 per cent was under implementation.

Yet, some investors are skeptical about coming to Bengal given the Centre-state relationship.

“Big-ticket manufacturing project is not possible with a hostile Centre-state relationship,” said the representative of a large company from outside Bengal.

From that perspective, investors were keenly watching the outcome of this election.

That Centre-state relationship is important is manifest in the interest that major investors showed during the tenure of Buddhadeb Bhattacharjee when the Left Front supported the UPA government at the Centre.

Between 2004 and 2008 when it was a key ally, DPIIT figures show that Bengal saw Rs 1.2 trillion of proposed investment through IEMs.

The Left Front’s land policy also helped, pointed out a bureaucrat. Even after the land agitation in 2008, the government had acquired land for industrial estates.

“Investors showed interest in these even after the agitation,” he said.

In May 2011 — when the change of guard happened — Bengal had topped the charts as the leading state with proposed investment of Rs 2.7 trillion, ahead of Odisha (Rs 1.6 trillion), and Tamil Nadu (Rs 26,992 crore).

During January-May 2011, West Bengal (at Rs 2.9 trillion) was ahead of Odisha (Rs 2 trillion), Maharashtra (Rs 76,341 crore), Andhra Pradesh (Rs 70,152 crore), and Karnataka (Rs 65,439 crore).

“There is sometimes latency in filing IEMs. Investors like to file after some concrete steps have been taken,” said the bureaucrat, explaining the quantum jump after land agitation.

Political analyst Sabyasachi Basu Ray Chaudhury said, “Land is fragmented in Bengal due to land reforms.

"The Left Front burnt its fingers in acquiring land for big industries.

"But the IT hub can be expanded and Bengal can become a connectivity hub and an education hub.”

He also said that even though the mandate is seen to be partially for Banerjee’s welfare schemes, a focus on jobs and employment was likely.

In 2015, at a ceremony to dedicate the modernised IISCO plant at Burnpur in Bengal, Banerjee had said in the presence of Prime Minister Narendra Modi that politics and development have their own place and should not be mixed.

But much water has flown under Howrah Bridge since.

On Wednesday, however, Banerjee tweeted: “Thank you @narendramodi ji for your wishes.

"I look forward to the Centre’s sustained support keeping the best interest of WB in mind.

"I extend my full cooperation & hope together we can fight this pandemic amid other challenges & set a new benchmark for Centre-State relations.”

Photograph: Rupak De Chowdhuri/Reuters