Mamata 3.0: Will industrialisation pick up pace now in West Bengal?

Though the mandate is seen largely an outcome of Banerjee's welfare schemes, she promised to industrialise at a faster pace, as per the party 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 @JSWCement, 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. Banerjee was sworn in on Wednesday.

JSW Cement has a 2.4 million tonne cement plant at Salboni in West Medinipur district, which will increase to 3.6 million tonnes by August-end. By 2025, the company has a plan to take its total capacity to 25 million tonnes 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 in the next five years, considering the need to industrialize at a faster pace. About Rs 5 trillion of new investments would be attracted in the next five years. And steps would be taken to get IT and BT companies – both industrial and foreign – to establish businesses in Bengal.

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). Plus, 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 that West Bengal is lagging behind some states. In 2020, 27 IEMs (industrial entrepreneur memorandum) were filed with a proposed investment of Rs 9,552 crore. The proposed investment for Karnataka was Rs 1,62,492 crore, Gujarat Rs 46,141 crore, Maharashtra Rs 44,188 crore (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, 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 were 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.

During 2004-2008 when it was a key ally, DPIIT figures show that between 2004-2004 and 2007-2008, proposed investment through IEMs filed for West Bengal stood at Rs 1,23,639 crore.

What also helped, was the Left Front’s land policy, 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 – West Bengal had topped the charts as the leading state with a proposed investment of Rs 278,443 crore, ahead of Odisha (Rs 168,355 crore), Tamil Nadu (Rs 26,992 crore).

During January-May 2011, West Bengal (at Rs 296,958 crore) was ahead of Odisha (Rs 203,060 crore), Maharashtra (Rs 76,341 crore), Andhra Pradesh (Rs 70,152 crore), 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 West 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 West 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 modernized IISCO plant at Burnpur in West Bengal, Chief Minister Banerjee had said in the presence of Prime Minister Narendra Modi, 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 pandemica amid other challenges & set a new benchmark for Centre-State relations.