The Hindu Business Line : Bengal: Reform and perform

There is little doubt that the CPI(M)'s very own Mr Buddhadeb Bhattacharjee is right now busy trying to develop a proper investment climate for West Bengal, his current slogan (the veracity of which has been questioned in some quarters) being "reform or perish."

IT IS somewhat disappointing that the West Bengal Chief Minister, Mr Buddhadeb Bhattacharjee's recent visit to Singapore and Indonesia should have drawn so much attention not because of its basic thrust on seeking the wherewithal of economic development but whether what he is trying to do is the right thing from the point of view of the common man's welfare in the State. In other words, the controversy is all about the "path" to economic progress and not the "end" — growth, in itself. The saddening part is that, to some well-wishers of the State, it would appear to be nothing but an expendable luxury for West Bengal to argue about the right path towards economic progress when the world knows that it has been an economic laggard among Indian States over the past three decades — and this despite the remarkable progress the State has made on the farm front solely because of the land reform policies of the Left Front Government pursued under the leadership of Mr Jyoti Basu.

Even so, seen from a purely intellectual point of view, the subject — "which way to progress and development" — should lend itself to a healthy debate because it involves such issues as growth and distribution, which are especially important for financially poor economic units like West Bengal.

Surely, it cannot be the objective of sensible people to chalk out a growth strategy which, at the end of the process, will lead to the generation of a new breed of carpetbaggers leaving the majority of citizens out in the cold so to speak. This apart, there is also the subject of the share of agriculture and industry in the quest for overall growth, which is especially important in an environment where rural economic activity is predominant.

Seen from this perspective, the debate over Mr Bhattacharjee's visit is to be welcomed but, first, what specific achievements did the trip notch up from the point of view of West Bengal? In a very concrete sense, it was the Indonesian leg of the visit which produced substantive results for the State in the shape of an MoU involving three projects worth "thousands of crores of rupees". The first is an industrial economic zone (possibly in South 24-Parganas district) about half of which will be used for setting up non-polluting industries the rest being kept for knowledge-based units. The second project is a "high-tech health city" which will be built near the airport to the north of the metropolis. And the third is a four-lane 85-km modern expressway that will link Barasat in the north and Raichak on the river in the south.

The other achievement of Mr Bhattacharjee — less substantive but of equal importance nevertheless — was to send a clear message to potential investors in South-East Asia that his Government was ready to welcome foreign investment irrespective of whether the money came in as direct investment or was of the indirect variety, that is, from foreign institutional investors (read stock markets, etc). This was accomplished on the first leg of his tour in Singapore where he told businessmen that he was open to foreign capital and that he would allow 100 per cent foreign ownership in new ports, airports and other infrastructure projects. To quote him: "We are not looking for industrial finance only. We need FIIs to pump funds into our State."

If one leaves aside the larger issue of attracting FDI to the State on such a massive scale, the Indonesian projects have raised the dust of controversy mainly on one count, namely, whether it is proper to displace farmers for the cause of industrial growth. The issue figured in intra-CPI(M) discussions prior to the Chief Minister's departure for South-East Asia and, if reports are to be believed, one would have thought that the matter had been settled to the satisfaction of the protagonists involved on both sides of the table. In fact, on the eve of his visit, Mr Bhattacharjee made his position clear when he said: "Villagers need not be confined to agriculture alone throughout their lives. They should also think about graduating from agriculture to industry. They will have to sacrifice their land for the sake of industry which will generate more employment opportunities for our youths. But at the same time, those villagers affected in the process have to be protected and rehabilitated." He added: "We cannot live on agriculture alone. We need to set up industries and need land for (this purpose)."

Not many people with open minds can dispute this logic, especially in view of the fact that the farmers displaced by the industrial projects in question form a minuscule part of farming interests in West Bengal. When coupled with the assurance that there will be adequate and equitable compensation for those relocated, it is difficult to imagine that those opposed to the Chief Minister's initiative have really thought out their position on the issue rigorously. After all, as Mr Bhattacharjee is reported to have said (although some may fundamentally differ with him on this as a point of principle), "From agriculture to industry, from rural to urban life — that is the law of economic growth everywhere".

The Chief Minister's policy-oriented utterances in Singapore — on FDI, FII participation, reform, etc — have raised a different kind of storm which has involved not merely political parties such as the Congress but also the central leadership of the CPI(M) itself. What has primarily raised the hackles of the CPI(M) is the interjection in Parliament by none other than the Prime Minister himself who "congratulated" Mr Bhattacharjee on his stand on "reform" and exhorted other Chief Ministers to "emulate him". More important, it provided Dr Manmohan Singh the opportunity to declare that "ambitious schemes such as rural employment guarantee are just not sustainable minus reforms". Among other things, he argued that unless there was growth to the extent of 7 to 8 per cent, for which investment of around 28 to 30 per cent of GDP was essential, social development programmes could not be sustained. Large amounts of FDI were waiting to enter the country but for that "the right climate had to be created." What he left unsaid was that the Left's stand on partial disinvestment (not privatisation) of PSUs such as BHEL was not helping the process of developing the proper investment "climate".

However, there is little doubt that the CPI(M)'s very own Mr Buddhadeb Bhattacharjee is right now busy trying to develop that sort of climate for West Bengal, his current slogan (the veracity of which has been questioned in some quarters) being "reform or perish". As has been widely reported, he told a Singapore audience last Tuesday that "we either reform or perish". We also have it on record that he told a Kolkata audience on August 19 that, "as far as West Bengal is concerned, we will never block reforms," and that the current economic situation was such that "either you reform or perish".

Earlier still, on August 11, he explained his position in some detail thus: "What I am trying to do is to create an investment-friendly climate in (West Bengal), not only in our speeches in chambers of commerce but also in our actions. We face an image problem. We committed mistakes in the sixties and seventies. Investors are still apprehensive about us. Now we are trying to motivate workers and employees. This is a very competitive world. Productivity and production quality are not the responsibility of managements alone, even workers have to share it. For me, it is perform or perish. We still have a long way to go, but things are changing for the better."

One wishes the West Bengal Chief Minister all success in his endeavour, especially because (as is widely acknowledged) the potential for the recovery of West Bengal is very strong. Sceptics will, however, only hope that the State administration will deliver. After all, apart from Haldia Petrochemicals, nothing much has moved on the industrial front since the 1980s, and, of course, old habits die hard.

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