After many years there is
an air of optimism about the industrial scenario in West Bengal. Important
business delegations from the UK and China have made Calcutta their first
port cell in India. The long pending Haldia petrochemical project is being
resurrected with financial input from a top NRI, Mr. Chatterjee. The leading
German multinational, Siemens is also proposing to channelise a major part
of their Indian investments into their plants around Calcutta. One of the
top Indian business houses, RPG Enterprises, which operates practically
in every State in India has nevertheless planned a major part of its new
investments in West Bengal. The Bombay based steel company, Mukund is associated
with setting of a major infrastructural facility in West Bengal, even though
the political persuasion of the head of Mukund is quite different from
that of the local State Government.
This sea change is undoubtedly
heartening, and most welcome after the gloom and doom of the past two decades.
It is an indicator how quickly perceptions of the economic scenario of
a state can change. While this recent change has been a positive one, it
is also a pointer that there could be an equally rapid swing in the other
directions if the promise is not matched by performance. The question now
before us is can West Bengal deliver on the high expectations which have
been aroused?
First Let Us Look At
Positive Points. Perhaps the most important aspect in the anticipated
reindustrialisation of West Bengal is the fact that for historical reasons,
a very large number of head offices and registered offices of the top corporations
of the country are located in Calcutta. This gives the West Bengal Government
almost unparalleled access to the top corporate decision makers, which
is vital in the present competitive environment where practically every
State Government is vying to attract investment. The concentration of business
magnates and top corporate executives in Calcutta has not gone unnoticed
by other states; in fact there is a regular procession of Chief Ministers
and Industry Ministers from other States to Calcutta to meet the industrialists
here and pitch the case for investment in their respective States. In this
competitive environment, West Bengal is singularly fortunate. What other
States can achieve by sending a huge delegation, the top people in the
West Bengal Government can achieve with a telephone call. This is not a
hypothetical statement. In recent months, a number of Calcutta based industrialists
who were going ahead with plans for setting up new units in other states
have been fairly easily persuaded to relocate these units to West Bengal.
The availability of power
is another important positive factor. For most of the last two decades
the power situation in West Bengal was extremely grim and the phenomenon
of power cuts was far more widespread in Calcutta than almost any other
metro city or state Capital.
| In welcome contrast,
West Bengal is now generally surplus in power and in off-peak periods it
sells power to a number of neighbouring States. This amazing change perhaps
needs to get wider publicity both in West Bengal and in other States. Power
shortage continues to bedevil most States in India and the comparatively
easy power supply position in West Bengal can act as a powerful magnet
in attracting industrial investment from other States. |
|
The position on power in West
Bengal needs to be effectively marketed among industrialists of other States
so they are made aware of the advantages of setting up their new ventures
here. At the same time the red tapism for getting new industrial power
connections needs to be reduced. In spite of the easy power situation,
a CII study found that more than sixty separate steps were required before
getting a new industrial power connection from WBSEB! Really a case of
water everywhere but not a drop to drink.
The fact that Calcutta is
a metro city, (albeit an extremely run down one) is also a positive factor.
This legacy enables Calcutta to boast of an international airport, a major
seaport, three major banks with headquarters in Calcutta, India's second
largest Stock Exchange, an important High Court, an established network
of legal and accounting firms, headquarters of some leading Chambers of
Commerce and industry associations, a leading university of management
studies and so on. As a consequence of the general decline of the city
and the State, most of these important institutions have also got run down.
However, revitalizing them is much quicker and cheaper than setting up
such institutions anew. In that respect West Bengal has a distinct advantage
over other States which do not have a metro city as their State Capital.
The original impetus for
industrialization in India to start in Bengal was the availability of important
industrial raw materials like iron ore, coal, copper ore, oil and gas,
bauxite and mica, either within the State or in the immediate vicinity.
However, modern technological processes have rendered proximity to raw
material sources increasingly irrelevant for location of industry. Japanese
steel, Swiss chocolates, French high fashion garments all source their
raw materials from a great distance, While countries like Myanmar, Zaire
and Nigeria which have abundance of local raw materials continue to stagnate
in industry. For many years, both Government and industry in West Bengal
were caught in a time warp, and attributed almost every ill in the industrial
scenario to the freight equalization policy which robbed West Bengal of
its locational advantage vis a vis proximity of raw materials. Now that
the freight equalisation policy has been abolished it is apparent that
all the furore over it was more or less a red herring: doing away with
freight equalisation by itself has not made any appreciable change to the
industrial situation of the state. However, if the other factors are favourable
for industrialization, then proximity of important raw materials can certainly
be a supporting positive factor. To that extent, the State should make
a special marketing effort to attract industries using the raw materials
located in the Eastern Region.
Regarding industrial labour,
opinion is divided as to whether this is a positive or negative factor.
On the one hand it is true that the State has a large pool of skilled labour
with long history of working in an industrial environment. On the other
hand there is also a history of excessive militancy and poor work culture.
Of late there has been some indications of a more responsible trade union
attitude. If this is actually evidenced on the shop floor on a sustained
basis then labour will definitely count as a positive factor in the industrialisation
efforts of the State.
Turning now to the negative
factors, these have perhaps been tabulated ad nauseum. Poor roads, lack
of work culture, red tapism, difficulty in getting land allotments, goondaism
by local elements at the time of new recruitments all have been extensively
documented. There have been some hopeful indications that corrective measures
will be taken. This has to be followed through for implementation on the
ground. If the policy prescriptions are not translated into procedures
and practice, the current euphoria will soon dry up and the resulting disillusionment
will be even more damaging than the previous situation.
The large number of sick
and closed units in this region is certainly an inhibiting factor for fresh
investments. New entrepreneurs naturally feel that if conditions here are
so adverse that a large number of existing units are sick, they will meet
the same fate if they set up fresh units. A more expeditious way of reviving
sick units has to be evolved for both the private sector units and public
sector units. The existing
procedures through
BIFR and High Court have proved to be very time consuming and only a small
fraction of the sick units have so far been revived by this route. An expeditious
method has to be evolved of utilizing the land, buildings, plant, machinery
and stocks of closed units before they totally deteriorate and become junk.
In Western countries this process of reuse of the physical assets hardly
takes a few weeks whereas in India it takes a few decades ! While many
of the issues involved like the Companies Act and BIFR provisions may not
be within the purview of the State Government, because this State is burdened
with such a large number of sick units it can perhaps take a proactive
role in helping to streamline the various policies and procedures standing
in the way of speedy rehabilitation.
To sum up, after a very
long time there is at last a glimmer of hope. It is upto the state Government,
the industry and the trade unions to jointly work together to now transform
the hope into a reality so that West Bengal can start recapturing at least
some of its past glory. |