Business Daily from THE HINDU group of publications
Friday, Oct 27, 2006
Industry & Economy
States - West Bengal
A new dawn beckons West Bengal
Ranabir Ray Choudhury
There is a need to balance the requirements of further economic progress today and the practices of the past, most of which have been rural development-centric.
Steering the State: Mr Buddhadeb Bhattacharjee
Long before Job Charnock dropped anchor at the village of Sutanati, in 1690, and laid the foundations of Calcutta, Bengal had been engaging the world in trade. If in the late 13th century Marco Polo noted the commercial importance of Bengali cotton, in 1345 Ibn Batuta admired the fine muslins of Bengal. Agriculture and manufacturing boomed during the Mughal period and got a boost with the appearance of European merchants in the 16th century. Soon enough Bengal became the most dominant partner in the Asiatic trade of the Companies Portugal, Dutch, and English. So much so that the English factors regarded Bengal `the flower of the Company's garden' and the `choicest jewel'.
Even as the English engaged with people whom Lord Macaulay dubbed as untrustworthy and treacherous, wily and infinitely clever, many Bengalis were trading far beyond the Continent. For instance, Ramdulal Dey, who made a fortune trading with America. Dey was perhaps the first Bengali businessman to venture abroad to make his pot of gold, to be followed a few decades later by Prince Dwarkanath Tagore grandfather of poet Rabindranath Tagore whose wealth was nothing short of legendary. First to see an opportunity in what is today called the `core sector', Dwarakanath Tagore made coal one of his key businesses. He was followed in the early years of this century by Sir R. N. Mukerjee, described as "the foremost industrialist of contemporary Bengal" who, among other things, set up the Indian Iron and Steel Company.
Ironically, much of Bengal's glory dimmed, post Independence, and for a good three decades the State remained in the shadows, for reasons complex and mostly manmade, not to speak of the policies adopted by successive Central governments. Even Calcutta, since renamed Kolkata, seemed to be in a decline, overtaken by Mumbai and Delhi and, some may say, by Chennai too.
But the outlook is changing rapidly, and none today will doubt that this great city is waking to a great dawn. The Chief Minister, Mr Buddhadeb Bhattacharjee, is on the threshold of altering radically the economic situation of Bengal, which is rightly described as resurgent by established and potential investors both within the country and abroad. This effort has had favourable spin-offs in other sectors, and in sum improved the standard of life of the State's people.
Even the Chief Minister's political opponents agree that the future of West Bengal lies in carefully-engineered industrialisation. Clearly, Mr Bhattacharjee has been able to develop substantial political capital in favour of his drive to get West Bengal onto the fast lane of economic growth.
Yet, the State is at a crossroads. This is because, on the one hand, economic opportunities will open up no end for Bengal if the transformation is successful. On the other, the price of failure would be inordinately high because that would be a confirmation of the view that West Bengal is a lost case economically; this would have disastrous consequences for the average citizen.
The path of industrialisation will also have to be taken cautiously given the agrarian progress the State has achieved. It may raise especially ticklish issues of land acquisition. For instance, the ongoing campaign against land-acquisition for the Tata car plant at Singur the locale of the first big-ticket industrial investment to be attempted so near the metropolis of Kolkata. But this could prove a valuable learning exercise too, as potential investors and the State authorities are exposed to the social and technical obstacles likely to crop up in the way of implementation of such projects. There is, however, little doubt that the authorities will be able to settle the problems to the satisfaction of both the people of Singur and the investor concerned (in this case, the Tatas).
In fact, Singur represents the contradiction between the road to development and prosperity adopted by the Left Front throughout the 1980s and a part of the 1990s, and the current demands of development that is decidedly non-agricultural. Thus, in the 1980s and the 1990s the State government went all out to develop the agricultural potential of the Singur farmland which, by every account, was extremely fertile. Today, the same land has been chosen for setting up an automobile plant with farmers and landowners (including the absentee variety) being asked to give up their holdings, and perhaps even contribute to the car-plant activity both directly and indirectly.
Viewed in thematic terms, within the larger setting of Left Front rule, the `anti-thesis' seems to have developed today vis-à-vis the `thesis' of yesteryear from which, in the interest of consistency, a `synthesis' should evolve. Only this would further the general development objectives of the Left Front Government (the first Front Government was formed in 1977 under Mr Jyoti Basu). What precise shape this `synthesis' will have is the central point of interest today because its shape will, for practical purposes, provide the model for the further economic development of West Bengal for at least the next decade.
Of course, Singur may be an atypical example given the quality of its soil and a number of other positive characteristics (such as location), which may not be the case with other large industrial projects that may come along. But it must be noted that big investors would have a number of competing sites (in other States) to choose from and they will always select the one that is most attractive from all points of view. Clearly, all this will have to factored into the new "development model," the basic premise of which must be to use the already-developed agricultural base of the State for scaling new heights in industrial and other sectors.
As of now, Information Technology appears to be at the forefront of the State's drive towards further economic progress, though it must be said that the development of this sector does not at the moment hold out too many direct advantages for the huge rural population.
Further, its location (in and around Kolkata) is far too concentrated to have any favourable spatial spin-offs, which is an essential part of any large industrial development drive; there should be a direct step-up in local demand and development of local infrastructure.
In fact, the IT-growth (including exports) phenomenon in West Bengal appears to be dominated by three-four large business houses, which have probably been attracted to the State because of the low costs involved, coupled with the easy availability of personnel with work-skills.
As has happened with other centres of rapid IT-growth, these advantages are temporally restricted, which means that a time will come when Kolkata (and West Bengal) too will no longer attract the IT crowd. Such, however, will not be the case with industry and agro-based industry.
Mr Buddhadeb Bhattacharjee has a lot on his plate, his work being made tougher by the seeming contradictions between the requirements of further economic progress today and the practices of the past, most of which have been rural development-centric. Since West Bengal has to catch up with the rest of the country and perhaps even upstage other competing regions within the next decade or so, the Chief Minister must be given a chance to attain his dream one that may upset some of his own ultra-conservative party colleagues but which will in all probability offer a more comfortable life to the people of the State, both in the rural and urban areas, in the years ahead.
Will the `choicest jewel' of East India Company regain its lustre?
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