The Hindu Business Line : Bengal woos investments

THE AGREEMENT SIGNED on Thursday on the setting up of a minor port at Kulpi, near Kolkata, on the Hooghly is an important infrastructural step forward for the West Bengal economy. In recent months, increasing exports have been identified as a thrust-point for the State's economic resurgence. Kulpi can contribute handsomely to this effort especially because of its linkage with an export promotion special economic zone which will come up simultaneously and is, in fact, a part of the overall project. The plan is that initially the port will handle "some general cargo and containers" but will eventually be a container terminal servicing the associated SEZ. The 2,700-acre SEZ is expected to host manufacturing, leather and jewellery sectors which will require the services of a captive port. In fact, the SEZ-port complex is said to be a novel concept being tried out by the multinational logistics company, P&O, which is a major partner in the State project.

The Kulpi project is a milestone in the State's attempt to forge a public-private partnership to regain its economic pre-eminence. P&O Ports India, which operates the Nhava Sheva and the Chennai container terminals, is expected to hold the majority stake in the company that will run the port, with the Indian partners holding a majority in the SEZ. The State Government agreeing to allot a much higher stake to the private partners in a major infrastructure project involving a minor port and an SEZ is a clear signal that the Buddhadev Bhattacharjee Government is not going to make state control an issue when it comes to getting things moving on the economic front. In fact, in recent days the Chief Minister has sent the clear message that there is no longer any room for the ideological trappings of the past in the Left Front-ruled West Bengal — particularly those relating to control of economic activity. On one occasion, he said with disarming panache: "Ours is an open policy. We want private capital." But where does this leave the Marxist Chief Minister vis-à-vis the Left's national policy on such areas as disinvestment? Mr Bhattacharjee makes clear that his invitation to FDI is only for sick State PSUs.

One result of this campaign by the Chief Minister for FDI is the recent sharp increase in investment inquiries from Indonesia, Italy, Russia and China. International IT majors such as IBM and Cognizant have also shown interest in setting up shop in the State as have the domestic majors. Curiously, domestic non-IT investors have not been forthcoming, probably because of the unhelpful "image problem" — baggage Mr Bhattacharjee has been strenuously trying to offload. While his commitment to altering West Bengal's "image" for the better is not in doubt, the ground realities are still not conducive to getting the engine of economic recovery into high gear. Recalcitrant labour is one reason, though, happily, the newer industrial units have been largely free from the scourge. Of greater concern is the poor infrastructure, especially uncertain power supply, poor communication facilities, and an over-regulatory bureaucratic system. These drawbacks or the State Government's difficult financial situation cannot be wished away, and it remains to be seen how the Chief Minister tackles them to get West Bengal back on the economic track.