Slow Track In Bengal

Also strange is the time-frame the state government has suggested for these changes. Although DPLs power generating and distribution functions will be farmed out by April 1, the actual dissolution, when its employees are to be absorbed by either agency, is to be done after two years. Any further restructuring of the other two agencies, the report says, will be done after that. This is far too slow. Perhaps the state government does not see the need to accelerate reform because it is revelling in projected power surpluses for the next 21 years. One problem with this assumption is that a good deal of the additional capacity is to be put up by public sector agencies, for which funds are increasingly hard to come by. Second, the principal reason for the current surplus is that industrial demand dropped drastically between 1991 and 1994 precisely the years when the state government began economic reform. In any case, faster power reforms are crucial for the state as much for the message they send out to potential investors.

Despite the high-pitched marketing, West Bengals track record in attracting fresh investment has been dismal. In the last year, memoranda have been signed for just two projects. The record on implementation has been worse. State politicians like to explain all this away as an India-wide problem, but industrialists still complain of problems in getting land, power and water for their new units and of the cussedness of lower-level bureaucracy. In short, investors have been increasingly wary of Bengal, even as its chief minister steps up the sales pitch. A radical reformation of the power sector would have reassured investors who would have liked to take advantage of the states comparatively well-educated workforce and lower cost of living. Potential investors turned wary when the state government backtracked on its promise to privatise the Great Eastern Hotel. By opting for partial reform in power, the Left Front has lost another chance to improve its reputation.