Bengal Global Business Summit: A Jamboree That Will Yield Little

The much-hyped Bengal Global Business Summit (BGBS) that gets underway in Kolkata today (Tuesday) will end on Wednesday with Bengal Chief Minister Mamata Banerjee declaring that the state had received investment proposals amounting to some fantastic figure. The guess is that it would be around Rs 2.5 lakh crore (that’s thirteen zeros at the end of 25!), because the past business summits Banerjee had presided over had also yielded proposals amounting to similar figures.

If Banerjee is to be believed, the last three editions of the ambitiously-named ‘global’ summit got the state investment proposals worth nearly Rs 7.5 lakh crore! Admittedly, not all investment proposals translate into actual investments on the ground. But it is generally accepted that a business summit can be deemed a success if about 40 per cent of the proposals get translated to reality. Going by this, the last three editions of BGBS can be deemed to have been successful if they would have brought in at least Rs 2.97 lakh crore investments on the ground in Bengal.

But they did not, admitted a senior officer of the state industrial development department. The officer, who would not be named out of fear of reprisals from his vindictive political masters, said that the actual investments on the ground would be a miniscule fraction of the proposals received since 2015, when the first BGBS jamboree was held. Banerjee, or her Finance Minister Amit Mitra, have consistently refused to divulge the figures of actual investments on the ground in Bengal and a thick cloud of opacity shrouds the actual figure.

Also, Bengal’s calculation of investment proposals is deeply flawed and is often the subject of mirth. For instance, in a past edition of a business summit, Banerjee included the cost of infrastructure projects funded by the Union government in that financial year in the total investment proposals. Centrally-funded projects like building roads and, now, developing two ports in the state, form a major chunk of the investment proposals that Banerjee and Mitra claim to have received at business summits.

“Including the cost of proposed infrastructure projects in business proposals is ridiculous. This is done just to make tall claims, but is pointless,” said another senior state finance department officer, who is associated with organising the BGBS this time. State industries department officers revealed that of the Rs 235,290 crore of investment proposals supposedly received at BGBS 2017, less than Rs 1,500 crore worth of investment proposals have gone off the drawing boards. That is 0.63 per cent of the touted total investment proposals!

Apart from including the cost of infrastructure projects which, anyways, do not create permanent jobs, it has become standard procedure for Mitra to coax industrialists attending the summits to make promises which, more often than not, turn out to be empty since they are made under duress. In one of the past business summits, Mitra (who was seated on the dais at the closing ceremony) was seen and heard asking one top industrialist who has projects on the ground at Haldia to announce an investment proposal? The industrialist hemmed and hawed and Mitra reminded him that he had privately spoken about building roads, boundary walls, staff quarters and other infrastructure within his projects area. “How much would that be worth,” asked Mitra. The industrialist caught the clue and said “Rs 50 crore”. Mitra promptly added that figure to the list of investment proposals received at the summit!

This, say those associated with the summit, is the usual practice. “Industrialists and other potential investors attending the summit are urged to announce investment proposals and many of them do so just to humour Mitra and Banerjee. But they actually have no serious intention of putting their money in the state,” said another industries department officer.

Also, most industrialists who attend the BGBS are cajoled into doing so. “Mitra, from his days in FICCI, knows many industrialists and he uses that connection to get big industrialists to attend the summit. But these industrialists come because not doing so would antagonise Mamata and no one wants to do so. Once they come, they are again cajoled into announcing something for the state but once they leave Kolkata, they forget about it,” said the owner of a major real estate firm who has been attending the summits. In fact, even private housing proposals are added to the list of ‘investment proposals flowing out of BGBS’.

The fourth edition of the BGBS will be attended by two big names - Mukesh Ambani and ArcelorMittal head Lakshmi Mittal. But not because they have big plans for Bengal. Banerjee went to Ambani’s house in Mumbai and Mittal’s residence in London to personally invite them to this edition of BGBS. “If the Chief Minister of a state goes to a person’s house and invites him, he will definitely heed the request. Ambani has business interests in Bengal and Mittal also has roots in this state. But that does not mean they will invest in that state. They are hard-nosed industrialists who don’t take business decisions on a whim or based on sentiments. They are also not swayed by any sales pitch, even if it comes from a Chief Minister. And if they find it worthwhile to invest in Bengal, they will do so notwithstanding BGBS,” explained a top Confederation of Indian Industries office-bearer.

Tuesday’s Kolkata newspapers carried full front-page advertisements of BGBS 2018. And in that, some fantastic claims about the state’s progress were made. Bengal’s economy, the advertisement claims, is the fourth largest in India, Bengal contributes 8.23 per cent to the country’s gross domestic product (GDP), that the state GDP grew by 15.5 per cent (ahead of all other states) in the last fiscal, and that Bengal tops in power distribution and availability. None of these claims have many takers among independent economists. “Had the state of Bengal’s economy been so rosy, it would have reflected on the ground. People would not have had to migrate out of the state for jobs and unemployment would not have been so high. The state government says Bengal is a power surplus state, but power cuts are still common in rural and semi-urban areas of the state. So making such claims makes no sense,” said an teacher of economics at Visva-Bharati University.

The summits, held at enormous public expense, are thus nothing but useless exercises that yield little results. It is unlikely that Banerjee is unaware of the futility of the entire exercises. But she loves jamborees. And the summit also affords her photo-ops. The images of Banerjee hobnobbing with top industrialists go down well with Bengal’s gullible electorate and buttress her claims that she is doing a lot for the state. Hence, she will fete the smiling industrialists, urge them to invest in Bengal, and leave it to her Finance Minister to coax promises out of them. That very little of those promises will get translated to reality is a small detail no one ever bothers about.