DFID asks ICRA to study Bengal's competitiveness

Iron & steel, handloom sectors to be focus areas, along with labour costs

British funding agency DFID has commissioned a study to prepare a report on the industrial climate in West Bengal with special focus on iron and steel and handloom sectors.

The agency will explore competitiveness of state's incentive scheme, labour cost arbitrage and the land situation among others.

The report would be prepared by ICRA and handed over to the state government on completion.

"The state will prepare an action plan based on the report," Sabyasachi Sen, principal secretary, commerce and industries, government of West Bengal, said.

The study has been commissioned two month ago.

It would look at the incentive scheme currently being offered by West Bengal and compare it with other states. Incentives, especially by waiver of sales tax, were an area of concern with value added tax (VAT) expected to come in from April 1, 2005.

Sen said the state would continue to honour its commitment even under the VAT regime.

With regards to the land issue, the study will look at the availability of land in and around Kolkata and in the districts.

The state has been unable to provide land demanded by industry near Kolkata, but there was reportedly surplus land in the districts.

The study will analyse the labour cost situation in West Bengal and compare it against other states.

As far as the iron and steel sector is concerned, the report would look at the sub-sectors where investment had come in and analyse whether growth was sustainable over a long run and if the units would be competitive in future.

This sector has seen investment worth Rs 8,000 crore in last few years, according to state government claims.

The study will also do a SWOT analysis for the handloom sector.

DFID was funding some social sector projects in West Bengal at present like the district primary education project (phases 1 and II) , Kolkata Urban Services for the poor, Kolkata environment improvement project and the eastern India rainfed farming project.

DFID's assistance to the state would go up 60 million pound by 2006-7 from 32 million pound in 2003-4.

It was helping the state government retire manpower and restructure the state public sector undertakings by offering social safety net for retrenched employees.