What Mamata’s Comments At An Infosys Event Tell Us About Ease Of Doing Business In Bengal

Bengal Chief Minister Mamata Banerjee inaugurated an Infosys data centre at Rajarhat in the outskirts of Kolkata on 18 December. 

Speaking at the ceremony, and in the presence of Infosys' Chief Financial Officer, Jayesh Sanghrajka, and other senior figures from her administration, Banerjee warned against “outside interference” in the functioning of the Infosys facility. 

She said any “external disturbance will not be tolerated.” Her stern warning was specifically directed at her party’s local member of legislative assembly (MLA) Saokat Molla and the party functionaries in general. 

The Chief Minister asked Molla to “cooperate with Infosys at all levels” and ensure that the company faced no trouble for outsiders in its functioning. 

This unusual remark from Banerjee, delivered to her own party functionaries publicly at an event where she once again attempted to showcase Bengal as a prime investment destination, speaks volumes about how investor-unfriendly Bengal has become. 

The reason why she delivered this dire warning is because she knows very well how her rent-seeking party functionaries and cadres interfere in private businesses and how such acts drive away businesses from Bengal. 

Trinamool Congress leaders and functionaries have become notorious for extorting huge sums of money and seeking favours from investors, industrialists, and businesspersons. 

Bengal has, in fact, earned notoriety for this reason. Trinamool Congress leaders not only indulge in extortions but also demand contracts for the supply of materials and a big say in recruitments. 

“This interference and extortions start as soon as the survey and mapping of a plot to set up an unit starts. They descend like vultures demanding that they be given contracts for construction, and for supplying materials and labour. If the investor refuses and engages his own contractor or procures materials on his own, a hefty ‘compensation’ has to be paid to Trinamool leaders,” an industrialist who was planning on setting up a steel rolling mill in Bengal but abandoned his plans told Swarajya. 

It doesn’t end there. Once construction is complete, Trinamool leaders want contracts for supplying machinery and equipment or, if such works are above their league, demand a percentage of the total value of equipment. 

“I have been told by fellow investors who have set up units in Bengal that the Trinamool leaders and cadres want contracts for interior works and even for regular supplies of raw materials or office materials, like paper or computers, etc. Then they demand that their cronies be recruited. In case they are unable to supply manpower with the required skills, they demand regular commissions from those who come to work from other areas,” said the industrialist based in Odisha. 

In industrial units that employ unskilled and semi-skilled people, Trinamool leaders often try to foment labour troubles and then demand huge sums of money for mediating and solving those very same troubles. They also make impossible demands, like hiking the wages of employees, which put the employers in a tight spot. 

Banerjee has been flooded with such complaints of interference in the functioning of industries and businesses, including the information technology (IT) sector, in the state. 

She has adopted a dual approach in addressing such issues. In case the unit or business is small- or medium-scale and the owner does not have much heft, she asks her senior colleagues to intervene and settle the matter. 

Such ‘settlement’ involves the business owner paying off local party functionaries. That keeps the functionaries off but only for some time. They return after some time with a fresh set of demands or create some more problems. 

“This cycle is endless. Senior Trinamool leaders intervene and solve a problem or settle an issue, with the businessman paying off the local netas, but the latter return after some time,” Delhi-based businessman H S Gulati, whose cousin had invested in the hospitality sector a few years ago but folded up and left due to such frequent interference, told Swarajya. 

In case such a complaint reaches the Chief Minister from a major investor or a big businessman, she asks local Trinamool leaders who are creating trouble to lay off. But here, too, some senior Trinamool leaders intervene and request the complainant to make a one-time payment to the troublemakers from the party and settle the matter. 

Adding to all this is the investor-unfriendly attitude of bureaucrats, especially the ones at the lower levels. The petty babus are the ones who pose the biggest and most intractable hurdles for investors and businesses. 

“There are a plethora of permissions and clearances that are required. The single window for clearances that the Chief Minister often touts just does not exist. In Bengal, getting all clearances takes at least thrice the time it would take in Maharashtra or Tamil Nadu. And the babus are notorious for demanding bribes at all stages. What makes things worse in Bengal is that even after pocketing the bribes, they do not deliver,” said Gulati. 

Banerjee has admittedly been trying to get Bengal’s infamously lethargic bureaucracy to deliver, but the terrible work culture that has become endemic in the state has proved difficult to reform. 

But the biggest challenge before businesses in Bengal is what the Chief Minister rightly termed as ‘external disturbance’. 

That she felt compelled to bring the wrongdoings of her own partymen out in the open and warn them publicly speaks volumes about how widespread the rent-seeking practice by Trinamool Congress leaders has become. 

And it also shows that the problem has become so acute that the Chief Minister had to warn the local MLA — it is the local MLA and all the functionaries below him who indulge in rent-seeking — to lay off Infosys. 

Many say she did so because it was Infosys. She knows well that if Infosys were to have a bad experience in Bengal, word about Bengal being bad for business would spread swiftly among the big names in the corporate world, and she would not be able to draw in investments, especially of the big-ticket kind. 

She has already been bitten once by the bitter experience of a big name — Tata Motors — that had to exit Bengal because of her. The departure of that corporate giant damaged the image of Bengal, perhaps irretrievably, as an investment destination.

She does not want that to happen again. That’s why she asked Molla to stay away from Infosys.