If the business events of this week are any indication, West Bengal is in for some serious industrial overall in the coming days. A state which has gained the reputation of being one of the lowest priorities for industrialists in terms of investment, it seems to have over the last few days become a magnet for industry bigwigs. Of course, it was the week that the state government hosted its annual industry event, the Bengal Global Business Summit, but earlier there were not as many star industrialists as this year. Among the attendees were international steel magnet Lakshmi Mittal, Reliance Industries chairman Mukesh Ambani and Pranav Adani, nephew of Gautam Adani, head of the Adani Group. Together they have reportedly made investment proposals to the tune of two lakh crores. Moreover, this week saw Sajjan Jindal restart the Salboni cement plant, a project which had been stuck for years. Clearly, there are some paradigm shifts that are making industrialists more comfortable with the idea of investing in Bengal.
During Banerjee’s first term, the industrialists mostly stayed away. It began of course with the Singur agitation, when she, then in the political opposition, led farmers to unite against the then government’s decision to set up a factory for the manufacturing of Tata Motors’ small car, the Nano, at a Calcutta suburb called Singur. The movement eventually drove Tata out of Bengal and it earned Banerjee the “anti-industry” tag. This was further reinforced when immediately after coming to power in the state elections of 2011 she declared a new land policy which put the onus of land acquisition on private ndustrialists. “In a state like Bengal where land is divided into small plots owned by different individuals, it is next to impossible for business enterprises to gain the consent of all the farmers to set up their factories without the help of the government,” explains a business financer based in Calcutta. “So it was tantamount to not being able to do business. So why would they invest?” The government also refused to accord Special Economic Zone (SEZ) status to companies as do many other states which allows them special exemptions such as tax redemptions. In fact, global IT giant, Infosys’s starting of business in Bengal was for a long time stuck in the doldrums over the issue of SEZs.
Other factors contributing to an atmosphere considered “not conducive” for setting up business, according to industrialists, had to do with alleged threats from local goons who controlled monopolies on building construction material and would demand that the industries buy only from them. “These thugs often claimed to have backing from the political parties which used their muscle power during elections as quid pro quo,” pointed out the financer. “The material is often low grade but the prices are high. Such threats dissuaded industry.”
When Banerjee’s second term started in 2016, she made certain paradigm shifts. In speech after public speech she warned “syndicates” – as the building material companies are called – that she would not tolerate hooliganism. Whether the ground reality was altered or not – for the most part it has not, according to local developers, who continue to crib about threats from goons – the message to industrialists was loud and clear: “you are safe here”. It is also entirely possible that the government’s attempt to set up a power grid in another Calcutta suburb called Bhangar – which now, after violent clashes between police and locals opposed to the project ,during which one man had died in firing, is as disputed as Singur – is more than an attempt at instituting industry. It is entirely possible that the decision to try to thwart the local dissent is an indication that the government was willing to do what is necessary in order to bring in industry. And more importantly, to show industrialists that it was willing do what is necessary.