Mamata Banerjee has one of the most unenviable tasks in the country today. She has to attract investors to Bengal at a time when she is at war with the union government – not a cold war or shadow boxing, but shooting war with the establishment at the Centre in general, and the Prime Minister in particular. In short, when the political daggers are out.
In fact, nothing can be more uninspiring to an average investor than the political theatre of Bengal these days. The roads of Kolkata and prominent towns such as Durgapur, Asansol, Midnapore, Siliguri have become a convenient stage for high-pitched protests and agitation against the Prime Minister. Ruling party supporters are blocking rail tracks and roads. The heighten the noise, Bengal’s ruling party MPs have carried the agitation and dharna to the nation’s capital as well and have tried to laid a siege to the Prime Minister’s office and residence.
INVESTORS IN CROSSFIRE?
While on the one hand CBI is arresting prominent party leaders on allegations of corruption, the Bengal chief minister is crying political vendetta, and at almost every opportunity, she is making it clear that it is a fight to the finish. After the arrest of Tapas Paul and Sudip Bandyopadhyay, the chief minister has publicly announced that the state administration can get even by arresting BJP leaders in Bengal. She is also attacking Modi personally, and religious leaders close to her are issuing fatwas to shave his face and blacken it.
Till a few days ago, Trinamool leaders were the only ones to cry vendetta. But from Saturday evening, when police arrested a BJP vice-president Jaiprakash Majumdar in Bengal, BJP leaders are also making the same allegation against from BJP leaders. State BJP president Dilip Ghosh is also apprehending arrest in a case that appears to be a gang war between criminals in Kharagpur.
Mamata Banerjee may have her own set of calculations that can point to long term political gains. But 72 hours before the much-hyped business summit, the moot question is, what does the poor investor do?
This correspondent spoke to a few investors, who feel the Bengal chief minister never held any investor summit in a more awkward moment. “The state government constantly fighting the Centre is the nightmare of any investor. Though investors are not as overtly dependent on the union government as earlier, they have to fully bank on the Centre on a number of crucial issues such as coal and gas linkages,” said an investor who has a number of interests in the state.
“Any investor looks for stability, not only of the political establishment, but also of economic policies and a smooth relation between the Centre and the state,” said another.
IN STABILITY WE TRUST
That the chief minister is fighting against terrible odds in more than evident. In the 2016 summit, as many as four union ministers – Arun Jaitley, Nitin Gadkari, Piyush Goyal and Suresh Prabhu took part. This year as the curtains will go up on January 20, the Centre will be presented only by Jaitley. Significantly, there are already howls from the state BJP leaders that they find it frustrating that a senior minister will take part in a roadshow when the two parties are going through their worst relations.
The tension does not end here. Senior Trinamool leaders say apprehensions that the union finance minister may highlight the need for demonetisation from the dais are running high in the party camp. The chief minister is easily the most vocal critic of the move in the country, and should Jaitley launch into a praise, today’s tension may take unpredictable turns in full view of the world.
Foreign delegates, too, won’t feel assured. The chief minister took a business delegation to Munich in September 2017. “Consider Bengal your homeland. Come to Bengal, see Bengal and invest in Bengal,” she told a packed room at an event organised by the Association of German Chambers of Commerce and Industry. The visiting German representatives would not certainly like to see their hosts at visible discomfort with the rulers of the country.
The first stint of Mamata Banerjee (2011—2016) was spent in great suspicion that she was not friendly towards industry, and some of her policies were not conducive to investors. She and her FICCI-trained finance-industry minister were not seen doing much to dispel it. No doubt, the chief minister ‘banned’ strikes and bandhs, and produced a lot of figures to prove that the widely lampooned work culture in the state has improved. Though it remained unclear how much of an image correction they could achieve, her second stint has begun with the political war drums rolling.
“The odds are stacked against her as she goes out to woo the investors. The land policies remain unchanged. In the past six years, none in the government explained why Trinamool Congress is opposed to SEZs,” pointed out a senior bureaucrat.
The unexplained opposition to SEZs has stalled promised investments in software campuses by giants Infosys and Wipro, and many other projects that these two would have inspired. Lakhs of square feet of built up IT space are lying vacant. The complaints of extortions from businesses and entrepreneurs that were numerous in the first tenure, have not vanished altogether.
Another investor pointed out that the much touted land bank in Bengal is not of much use. “One may not be interested in setting up a factory where the administration has land. An investor chooses a site on a number of factors such as electricity connection, water availability, rail and road connection, proximity to markets and raw materials. It is not very likely that the government will have ready land of the size an investor needs that fits into this complex need matrix. It is advisable that the government tries to make available a plot of land in an area that will be suitable for the factory,” he said.
THIRST AND FAITH
Bengal is thirsty for investments. All the drives for investments in manufacturing and IT sectors that the Left undertook either failed to live up to its potential, or were left midway. Mamata Banerjee had a historic opportunity to pull the state out of the rut, but political compulsions came in between.
For the past few decades, Bengal has failed to live up to its potential in attracting investments. Unfortunately, political differences between the ruling party and the ruling establishment were one of the reasons. Since the 2011 parivartan, the situation has hardly changed except in the first few months when a few green shoots signalled misplaced hope till October 2012 when Trinamool’s honeymoon ended with the UPA government.
Keynes said investment is an act of faith. The modern day investor will testify that investment is also an act of political balance – he never invests in a state where there is an obvious disconnect between the local and the federal government.
The sooner the politics changes in Bengal, the better it is for the millions of unemployed hands in the state.