Tata to an Industrialised Bengal?
Not really, there is sufficient investment in the state. What will be affected is the state’s image. by Lola Nayar

GOING by the volume and intensity of India Inc’s support for Ratan Tata, West Bengal would be in deep trouble if the Nano doesn’t drive out of Singur. A leading industry association head went as far to say that the state could “kiss its industrial dreams goodbye’. That, however, could take some doing: over the last one year, ‘West Bengal has emerged as India’s top destination for new investment projects.

In the year to June 2008, West Bengal attracted Rs 1.09,821 crore, or over 15 per cent of the total investments, taking it to the top slot,” says Shashikant Hegde, CEO, ProjectsToday, which tracks all project investments in the country. In fact, a Planning Commission official emphasise that the state government’s pro- private sector and pro-investment attitude has been “gradually improving work culture and reviving hopes of West Bengal once again emerging as a major huh in the country’.

The Centre for Monitoring Indian Economy (CMIE) data reveals that in case of outstanding investment proposals too, West Bengal has seen a quantum jump. The state has, for instance, registered a 76 per cent growth for 2007-08, to Rs 4,77,370 crore worth of outstanding proposals. In manufacturing alone, investments have risen sharply from R 96810 crore in 2006- 07 to Rs 1 crore in 20 Unlike the late ‘90s when many of the proposed projects fell through, since 2004-05 there has been almost zero dropping of projects,” says Mahesh Vyas. CEO, CMIE. While its hard to say how many planned projects will fructify finally it can be safely assumed that West Bengal isn’t doing too badly.

Of course, the haste to push through industrialization has its costs, It is not just the aggrieved displaced farmers in Nandigram and Singur who have joined forces with opposition leaders in voicing protests about the lack of adequate rehabilitation packages. or alternate livelihood. The discontent in this populated state has already found political reflection in the local panchayat elections earlier this year, with the ruling CPI (M) faring poorly. As Santosh Mohan Deb, Union minister for bean industries emphasises. The idea of pushing industrialisation was good, but the state government did not see local problems (proper compensation and rehabilitation packages).” State industries minister Sabyasachi Sen echoes his view. Candidly admitting that the state government had learnt its lesson (on land acquisition Iong back”, he says, “we’re still acquiring land for various projects but are now taking a process of dialogue”.

There would, of course, he a negative perception of the state if the Tatas were to pull out of Singur. “If the Tatas withdraw, it won’t be good for the image of Bengal and the country as the Nano project has grabbed global attention,” says Ashish Jhunjhunwala, chairman, CII’s, West Bengal State Council. He is also the CEO of steel player Ransarup Industries, which has invested Rs 1,000 crore in the state over the past two years and plans a further Rs 2,500 crore investment over the next three years.

On the other hand, CMIE’S Vyas argues that, barring political uncertainties, the Singur showdown will not severely impact existing investments in the state. “The impact is more likely on fresh investments, as the investors will be a little wiser. But investments already pro posed may not get affected.”
In fact, many major players including SAIL, Bhushan Ltd. Sterlite Industries. Tatas and JSW Steel are in the process of expanding operations in the state. Whether this Its 1,700-crore project remains or goes off, it is too small problem to affect the sta1!’s industrialization,’” says Videocon chief Venugopal Dhoct. That remains to be seen.

Published in Outlook issue date: 15 September 2008