In the recently concluded Bengal Global Business Summit, or the BGBS 2022, West Bengal signed 137 MoUs with various industry houses and the total investment proposals touched Rs 3.4 lakh crore, chief minister Mamata Banerjee said on 21 April. While Gautam Adani of Adani Group and other reputed companies have come up with investment proposals of various sizes, the chief minister is hopeful that all these proposals would generate at least 40 lakh jobs in the state.
In that case, West Bengal’s overall economy would undergo a sea change in primarily three industries — the Tajpur deep-sea port and logistics hub (likely to be built by Adani Group), a new coal project at Birbhum’s Deocha Pachami, to be developed by the West Bengal Power Development Corporation, and a potential natural gas deposit in North 24 Parganas where the Oil and Natural Gas Corporation (ONGC) is currently trying its hand.
The project proposals have only raised the expectations of the people. But questions are being asked about the MoUs signed during BGBS between 2015 and 2019. At the closing ceremony of BGBS 2022, Mamata Banerjee said that investment proposals worth Rs 12 lakh crore came in the previous five BGBS and they are at various stages of implementation. But surprisingly, no mention is found in the corresponding years’ Economic Reviews of the state.
However, according to sources close to the Bengal Chamber of Commerce and Industry (BCC&I), the West Bengal Industrial Development Corporation (WBIDC), and the Department for Promotion of Industry and Internal Trade (DIPP), between 2015 and 2019, the actual investment in the state’s industries was Rs.13,468 crore. While the chief minister claimed Bengal as ranking first in many areas of economic achievements, the BCC&I pointed out that the state’s position in country-wise investment ranking was 14 in 2016, 11 in 2017, and 15 in 2018.
Also read: Bengal is first off the block, to woo investors today as pandemic makes way for business
Crisis from below
Some questions are still lingering in the air about the actualisation of these and other proposals. While one may keep their fingers crossed and hope for the best regarding the ONGC’s effort to find a commercially viable natural gas deposit in the state, the Deocha Pachami coal block has already been allotted and Adani has successfully bid for developing the Tajpur deep-sea port. Yet, on the question of land acquisition in the Deocha Pachami area, Mamata Banerjee is fighting the shadow of the Nandigram and Singur movement.
The Deocha Pachami coal block has an estimated reserve of around 2 billion tonne of coal and 14 million cubic meters of basalt, covering 11,222 acres of land. To acquire and take control of the land, the state government has announced a Rs 10,000 crore compensation-cum-rehabilitation plan and the WBPDCL has selected 3,010 families for rehabilitation. But according to the last census, the area is home to around 21,000 people comprising 4,400 families, of which around 12,000 people are from the Scheduled Castes (SCs) and Scheduled Tribes (STs). The land rights of the STs are in place to protect them from the forcible acquisition of their land and entitle them to proper rehabilitation under the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013.
While some people have accepted the state government’s proposal and taken the compensation, the majority of them are still resisting. They have already formed a Bhumi Raksha Samiti (Save Land Committee) and did not allow the state administration to conduct the assessment of the social impact in the area. While the government has upped the offer of compensation/ rehabilitation package by revising it upward, the tribals are still reluctant to give away their land and traditional livelihood. However, Mamata Banerjee is hopeful of winning them over to her side soon. The final word about the Deocha Pachami coalfield project isn’t out yet.
What Mamata’s land movements led to
Perhaps, the implementation of the Tajpur deep-sea port and discovery of a natural gas reserve in West Bengal and the opening of the Deocha Pachami coalfield will promise a new era of industrialisation that would break the impasse of years. In 1996, after a long wait for investment, Dr Purnendu Chatterjee, a Bengali entrepreneur, came forward to make the dream of Haldia Petrochemicals true. Following its success, a good number of industries came to the state. But, the land movement in Singur and Nandigram and the consequent land policy declared by the Mamata Banerjee government worked as massive discouragements to the new investment in the industry in Bengal.
In the absence of big-ticket investment for a long time, Bengal’s economy has been facing a tremendous crunch in the creation of new opportunities. Skilled, unskilled, and semi-skilled workers started migrating to other states in greater numbers. During the Covid pandemic, Mamata Banerjee herself admitted that at least one million migrant workers had returned from other states. According to a study conducted by the Centre for Monitoring Indian Economy (CMIE), West Bengal’s unemployment rate remained steady at 17.4 per cent in May 2020 (the peak of the pandemic). It was 6.1 per cent in 2019.
Also reads: Political violen
Tackling debt trap, breaking image
A cursory look at the finances of the Mamata Banerjee government gives some causes of concern. The state is increasingly relying on market borrowings to meet its financial responsibilities. On 31 March 2018, the total liabilities were Rs 3,74,145,19 crore, of which market borrowings were Rs 2,18,943 crore. The State Finance Audit Report, compiled by the Comptroller and Auditor General of India, observed that the “Liabilities are on the ascending trend over the last five years.” Also, “Public Debt repayment, as a percentage of Public Debt receipts, increased from 30.55 per cent in 2016-17 to 48.62 per cent during the year 2017-18, indicating an increase in the utilisation of Public Debt Receipts for repayment of earlier Public Debt.”
Confirming the apprehension, the effective outstanding overall debt stood at Rs 4, 81,999 crore in FY 2020-21, of which the total market borrowing stood at Rs 4,04,417 crore. It is true that the state government has increased its spending on the social sector, mostly in education, health, and social security. But the growing dependence on market borrowing is steadily pushing the state into a debt trap. Already, Mamata Banerjee has expressed concerns and said that the “country’s economic situation (is) getting bad to worse. I doubt if states will be able to pay salaries in coming days.”
The impediments (to fresh investments) are both psychological and material as observed by the BCC&I back in 2014. The trust deficit, which had developed as a direct fallout of Tata’s forcible exit from Singur, is big, but that can be overcome if a big-ticket investment (like Adani’s Tajpur port project) or two come to Bengal.
To break her post-Singur anti-industry image, Mamata Banerjee is trying hard to woo the industry. For that, she is slowly diluting her previously declared “No SEZ” policy too, as Adani’s APSEZ has been allowed to bid for the Tajpur deep-sea port project. Her government’s declared policy of no forcible acquisition of land is being tested in the proposed Deocha Pachami coal project as well. Will she be able to bring investment back into the state? We will have to wait to see the results.
The author is a journalist and political analyst. Views are personal.
(Edited by Humra Laeeq)
Source: The Print
