The two-day Bengal Global Business Summit 2015 got off to a reasonable start on last Wednesday with both Finance Minister Arun Jaitley and West Bengal Chief Minister Mamata Banerjee deciding to highlight the need for reviving the investment climate in the state. The stakes are high for the Trinamool Congress-led government that in the first half of its five-year stint in power has drawn a blank in securing any big-ticket private investment. The West Bengal government has a lot to do to establish its credibility as an investment destination. The near-total absence at the summit of leading private-sector industrialists underscores the extent to which Ms Banerjee's dispensation has lost business goodwill. But the investment opportunities are huge and for his part the state's finance minister, Amit Mitra, has made some progress in increasing the ease of doing business by making the tax administration more efficient and friendly.
While Mr Jaitley confined himself to saying nice things and seeking the Trinamool Congress' support for the goods and services tax, it was the transport and waterways minister, Nitin Gadkari, who announced an enticing array of gifts by promising a Rs 16,500-crore investment for a deep-water port where the Ganga meets the sea, making the Kolkata-Varanasi inland waterway navigable at a cost of Rs 12,000 crore and funding a second Kolkata-Siliguri highway at Rs 10,000 crore. The other big-ticket public sector announcement came from Steel Authority of India Ltd (SAIL) for setting up a new steel rolling capacity in the state at an investment of Rs 40,000 crore. The single significant private sector investment promise came from the Hiranandani group for an offshore liquid natural gas terminal and regasification plant in Digha at a cost of Rs 4,000 crore. Being well out into the sea, the impact of the project on the seaside resort will be minimal.
Significantly, the services sector was better represented with the presence of two bankers and the Tata Consultancy Services (TCS) chief, N Chandrasekaran, who announced the creation of 13,000 jobs in the state over the next two years. West Bengal suffers from two serious disadvantages in attracting large-scale manufacturing investment. One is the availability of land. After having driven out the Tata small-car project on that issue, no amount of protestations from the state's chief minister that land is available - not even her assertion that she had cleared land for the SAIL project the previous night - will create confidence, unless a firm actually stands up and says that it has all the land that it needs. The other issue is law and order at the grass roots. Even as the summit was on, workers at a nearby TCS construction site, demanding compensation for a colleague who had died in an accident, burnt vehicles before the police could establish control. Many a project site is troubled by local agitation, sometimes led by a ruling party member, for one reason or another. These negate the substantial advantages that the state has like abundant power and skilled labour. Until there is substantial and noticeable reform in governance, the state government's claims of being business-friendly will continue to be questioned.
