Can Amit Mitra bring back industry to West Bengal?

Despite making the right noises, Corporate India wary of investing in Mamata's Bengal

Singur and Haldia have claimed another casualty in West Bengal. This time it is the Industry Minister Partha Chatterjee who was asked to step down. West Bengal media claim that Chatterjee was asked to go by the state's chief minister Mamata Banerjee due to perceived non-performance. Banerjee however said that her minister has been stripped of his portfolio as he was not finding time to manage it. Chatterjee managed four portfolios, out of which two industry related portfolio's have been taken from him and given to the finance minister Amit Mitra. 

 

Telegraph reports quoting unnamed industry sources that Chatterjee lost his job because he could not find a solution to the Haldia Petrochemical Ltd (HPL) issue and also failed to bring industries into the state. Chatterjee quit as chairman of state controlled HPL immediately after he stepped down from the industry ministry. 

 

HPL's erstwhile promoters Purnendu Chatterjee of The Chatterjee Group (TCG) are in a legal battle over the ownership of the company with the West Bengal government. HPL barely has enough money to fund its operation. According to the same Telegraph report, if new funds are not raised by mid of January the company might not be able to fund its future operations. Partha Chatterjee had tried to arrange funds by asking Indian Oil Corporation to invest in the company despite opposition from TCG. There is however no clear long term solution in the HPL case. 

Apart from HPL, issues related to Haldia Port Trust where ABG Shipyard pulled out from its investments and operations at the port also weighed on the non-performance of Chatterjee. But is Chatterjee alone to be blamed for lack of investments in the state. And also, will Amit Mitra be able to turn the tide of investments in the state?

 

Mitra, ex-secretary general of FICCI (Federation of Indian Chambers of Commerce and Industry) is known for his proximity with corporate India. He has been credited for organising a meet in Mumbai where Mamata Banerjee addressed 47 business heads, including Mukesh Ambani. But nothing has come out from these meetings. Though Amit Mitra has been making claims of the state receiving investment proposals worth Rs 80,000 crore in 2012 and Rs 112,769 crore in 2012-13, actual investment as per the state's Economic Review is only Rs 400 crore.

 

It is apparent that Mamata Banerjee and her team is desperate for investments in the state. To be fair, a lot of ground work has taken place in the state. In her address in Mumbai, the Mamata banerjee said that man hours lost on account of strike and hartals have come down from 78 lakh man hours to zero in a matter of two years. 

 

But for every positive development, the fact remains that memories of the violent agitation in Singur and  Haldia Port is still fresh in the minds of the entrepreneurs. Investment proposal numbers filed by Department of Industrial Policy and Promotion (DIPP) perhaps sums up the predicament clearly. Investment proposals received by West Bengal in 2008 was Rs 95,000 crore which came down to Rs 5,869 crore in 2012 when Mamata Banerjee came to power. 

 

Investors are not against investing in West Bengal, but are clearly not confident of the investment climate yet despite Mamata Banerjee and her team making the right noises. Bringing corporate honchos on a common platform to attend a seminar and give speeches is one thing but its not easy to get them to commit their investments unless they feel secure about their investments. 

 

Amit Mitra's connections with the industry will now be put to test.