Financial Daily from THE HINDU group of publications
Friday, Jun 18, 2004
Opinion - Interview
`We are an investment-friendly government' Mr Buddhadeb Bhattacharjee, Chief Minister of West Bengal
Ranabir Ray Choudhury
Mr Buddhadeb Bhattacharjee, the "poor Chief Minister of a poor State," exudes simplicity and sincerity while talking about what he has been able to do for his part of the country during the past three years he has been at the helm of the sixth Left Front Government in West Bengal. When asked about his `achievements', he politely says that he can talk about what he has accomplished as part of his development programme. Whether that has been an `achievement' is for the world to decide.
Mr Buddhadeb Bhattacharjee spoke to Business Line at Kolkata's Writers' Buildings earlier this week on the recent developments in West Bengal, especially the recent successes in IT and his own efforts to consolidate the gains made on the farm front.
Excerpts from the interview:
What have been your major accomplishments in the economic sphere as Chief Minister of West Bengal during the past three years?
The first thing I have been trying to do is consolidate our success in agriculture. That is my priority. After all, 70 per cent of agricultural land belongs to poor and marginal peasants, and they comprise 94 per cent of our farmers. Secondly, we are focussing on the emerging area of agro-business.
Can you give us some details?
In agriculture, take foodgrains, especially rice. Over the past three years, sustainable growth has taken place, with an average production of 150 million tonnes. Food security for West Bengal's population has been ensured now.
As regards the emerging areas in agro-business, take horticulture and floriculture. Five years ago, we could not think of exporting fruits or flowers from the State. This year we are exporting a very large quantity of Malda mangoes to China. From last year, we have begun exporting mangoes and lichees to six European countries.
What about value-addition activity in agriculture?
Yes, we have taken up food-processing in a big way. Five agro-export zones have been identified dealing in pineapple, mango, potato, lichee and vegetables. Here, the Government has come forward with facilities such as warehouses, multi-purpose cold-storages, etc.
What has been the response of industry to all this?
A number of big companies have shown active interest. Dabur is keen on pineapples. The Pepsi group is looking at potatoes. We have talked to Hindustan Lever on tomato-processing.
What stage of negotiation or project-execution is all this in?
You can say that the food-processing programme has taken off. For two years we have focussed only on fresh fruits. Next summer we will be doing very well as far as pineapple juice is concerned, which we will also market abroad.
After foodgrains and horticulture-floriculture, the third aspect of agriculture consolidation is crop-diversification. We are first in the country in rice production. Now we want to encourage wheat, pulses and oilseeds. In fact, I am going to meet the extension officers later this month and explain to them why we are focussing on crop-diversification.
The development of fisheries and animal resources are two other rural-related areas where we would like to concentrate our energies. We have been successful in the fisheries sector, having become the largest producer of fish in the country (1.3 million tonnes).
Taking all this together, my attempt has been to consolidate development in agriculture and the rural sector. I think we have been able to attain some sort of success in these economic areas in view of the fact that we are the only State that has been able to withstand the onslaught of the anti-incumbency factor in the Lok Sabha elections. This is because of our success in rural development.
Apart from agriculture, what have you done for industry?
Since 1994, when we announced our industrial policy, we have been trying our best to attract investments from within the country and abroad. The results have been encouraging in the last three years. In 2002 we brought in investments worth Rs 2,300 crore. In 2004, we will cross the Rs 2,500-crore mark. The main areas of investment have been iron and steel, especially around the mining areas.
Second, there is the petrochemicals, chemicals and plastics sector with Haldia being the centre of such development. In fact, Japanese FDI in India has been the highest in West Bengal (Mitsubishi in Haldia). Third, there is agro-business. Fourth, information technology.
Tell us something about the IT sector because of the splash it is making...
IT and biotechnology are the sciences of the 21st century. Today a country cannot advance without IT and biotechnology. We have been late-starters in IT, but I remember telling my friend Chandrababu Naidu some time back when I was in Hyderabad that we would overtake him in two-three years.
In the past one year we have been able to attract big foreign and domestic players such as IBM, Cognizant, Wipro, Satyam, Reliance, Tatas, ITC, GE... In fact, allotment of land has become a problem in the IT sector because of its scarcity. We don't have a "desert" here as there is in Hyderabad.
I can say that there has been a real breakthrough in the IT sector in West Bengal. In Salt Lake, 137 companies, small and big, are operating; there is no more place there. The second IT-centric development area is Sunrise City, where all available space has already been allotted. Now the third IT sector will be located at Rajarhat.
Which areas would you like to emphasise in the remaining two years of this Government?
It goes without saying that we would like to consolidate further the progress already made in rural areas and industrial investment. This apart, I would like to put very special emphasis on improving the quality of education, particularly the quality of teaching, starting from the primary level.
But this will take time...
True, but if we ignore this area of development it will harm us seriously. This is why we have already begun a special course on how to teach English for primary teachers. There are other ongoing programmes also to improve the quality of education imparted in primary schools. Funds have been allotted for the purpose.
What about the health sector?
Yes, along with education we will also have to improve the quality of health services. In fact, as far as health services are concerned, we cater to almost 70 per cent of the State's population.
No other State has been able to cover more than 50 per cent. The Government has a very big presence here. But we are also inviting private participation to improve the health sector.
Apollo has come, Dr (Devi) Shetty (Rabindra Nath Tagore Institute of Cardiac Sciences) and Dr (S) Badrinath (of Chennai's Sankara Nethralaya) have also responded well. One very difficult task is to improve the atmosphere inside hospitals, but that improvement will have to be brought about no matter how intractable the problem.
Turning to industry, apart from Haldia, which is developing into an industrial hub, are there any other areas in West Bengal where a similar transformation is taking place? Or is Haldia the only example?
Haldia is a new area and is not the only example. We have other growth areas such as Kalyani, Uluberia, the region around the Kona Expressway (decisions have been taken to set up a rubber park, foundry park, etc.), the Durgapur-Asansol-Bankura area (iron and steel) and Siliguri (tourism and food-processing).
Of course, since Haldia enjoys a lot of advantages, we are giving it the most importance. The Russians are setting up a huge truck plant there (the Ural Truck Company) for the Defence establishment. Land has been allotted for the purpose and erection work has begun.
What stage of implementation are these other growth areas in?
Siliguri is almost complete. We are waiting for investment proposals.
What is the financial state of West Bengal?
A: It is not very comfortable, like that of many other States. This is not a problem faced only by West Bengal.
The State's Finance Minister, Asim Das Gupta, has already held a round of discussions with the Union Finance Minister, Mr P. Chidambaram. As you know, we have made a representation to the 12th Finance Commission.
First, the Centre has imposed an interest rate structure on the States vis-à-vis Central loans (12 per cent) which is neither fair nor justifiable. We have just now received a UK Government loan assistance proposal for civic infrastructure at an interest rate of 1.65 per cent.
Second, there should be greater devolution of resources from the divisible pool (50 per cent in place of the existing 29 per cent). Further, because of our good performance in small savings, we are being punished.
On the other hand, we have increased our own internal resources (from the transport sector, higher court fees, etc). Some austerity measures have also been taken. We have 56 manufacturing State undertakings, most of which are not viable. With the help of a study done by PriceWaterhouseCoopers, we have begun a process to set this entire house in order (two units have been closed down).
A British DFID fund in the shape of grants is being got with the help of which the interest of the workers will be protected. As a result of all this, the State's fiscal situation has improved a little. We are trying our best to extricate ourselves completely from the problem by next year.
West Bengal still seems to have an adverse image problem to contend with. Is this justified?
We still have an image problem in various parts of the country and abroad. One reason is that we are a Left Front Government and many people are uncomfortable with the word "Left".
Recently I told a foreign envoy that if you can do business with China, why can't you do business with us. We are not going to invite you to set up shop in our State only to nationalise your assets later on. We are not fools.
But there is a change in that image for otherwise big companies like IBM or the Japanese (Marubeni, Mitsubishi, Itochu) would not have agreed to sink their money in our State. The Indonesian group Beni Santos is coming with a proposal to manufacture two-wheelers. There is a boom in the two-wheeler market in the rural areas because of the increase in purchasing power.
What is the experience of these foreign investors?
Till today they have not lost a single manday of work. In fact, West Bengal's image as a good investment destination has improved markedly in Japan. Even internally, there is some improvement. I have just been told of a proposal by Videocon to expand their manufacturing operations in the State. I must reassert that we are an investment-friendly government. We need serious investors. Cooperation is in our mutual interest. Investors need profits. And we need jobs and income.
As far as trade union activity of 1967 vintage is concerned, we did commit certain mistakes.
Today we are not encouraging such activity. Hooliganism will not be allowed. Legitimate trade union activity will be supported, but no violence or anything of the sort. Things are changing, and changing for the better.
Given the focus on IT, can we say that the West Bengal economy is perhaps undergoing a structural transformation of sorts?
The transformation is not from agriculture to IT. As I see it, it is agriculture plus IT. Or, computers and paddy.
Without consolidation in the agricultural sector, we cannot advance. We cannot industrialise the State. If that base is destroyed, you become like an island in space with only IT, and that is useless.
Are there any lessons to be learnt from the Andhra Pradesh experience?
Before Chandrababu Naidu's defeat in the polls, when I went to his State, Hyderabad was shining brighter than Kolkata. I had to address a public meeting at a place called Nalgonda, 106 km from Hyderabad, a Left bastion.
The scale of poverty in the region was absolutely unbelievable. Seeing this situation in the rural areas of Andhra Pradesh, I knew then that Chandrababu Naidu could not last long in the seat of power. The clear lesson is that if any State in a country like ours neglects the rural sector and agriculture, it simply does not pay.
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