Walking the talk

It is unfortunate that software major Infosys’s proposal to set up a special economic zone in West Bengal has been turned down by the Centre, reportedly on the grounds that the West Bengal government did not support it. Given the competitive nature of the investment market, Infosys can confidently expect invitations from more proactive States to consider locations in their States. The episode once again raises doubts as to exactly how serious West Bengal chief minister Mamata Banerjee is about her oft-stated intention of making her administration more business-friendly. In the current context, her statement to the business community in June that it was “time to stop talking and take action” rings hollow. The annual Global Business Summits held by her government will achieve little if investors believe that Banerjee’s walk does not match her talk. Not many have forgotten that she, as an opposition leader, had forced the Tata Group to relocate their plant to manufacture Nano cars to Sanand in Gujarat. When she attempts to woo foreign investors in September during her trip to Rome and other parts of Europe, Banerjee needs to be mindful that global investors are likely to question her on Singur and Infosys and her government’s commitment to bringing in new enterprises. It is futile to point to the investment proposals worth ₹2,50,253.74 crore received at the last Global Business Summit, if intentions do not translate into projects on the ground.

Mamata Banerjee needs to recognise that West Bengal cannot afford to drive away investments, particularly those that are both eco-friendly and job-creating. The State’s finances are in dire straits. West Bengal’s own tax revenues are just 4.9 per cent of its gross State domestic product (GSDP) for 2015-16, the lowest among all States that do not fall into the special category. The comparable number for Karnataka is 10.4 per cent. Bengal’s outstanding liabilities (State development loans, loans from National Small Savings Fund and other debt) for 2015-16 was estimated at ₹3,08,800 crore, the third highest after Maharashtra and Uttar Pradesh. As a proportion of its GSDP, its outstanding liabilities were 32.9 per cent, the highest for any State that’s not in the special category. Poverty levels are also fairly high, with about 29.7 per cent of the people in the State below the poverty line in 2011-12, according to the Rangarajan Committee’s estimates.

Mamata Banerjee can no longer afford to blame all that ails West Bengal on the quarter century of CPI(M) rule which preceded her coming to power. She is now into her second term as chief minister and she also has a very able lieutenant in State Finance, Commerce and Industries Minister Amit Mitra, who has spent the better part of his working life as secretary-general of industry lobby group Ficci. Mitra understands investors and businesses like no other State finance minister. Mitra can be a credible pitchman for her “Come to Bengal, Ride the Growth” theme with potential investors — but only if his government’s track record backs this.

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