Even As State Government Plans A 'Global Business Summit', Here's Why Big-Ticket Investments Continue To Elude Bengal
West Bengal chief minister Mamata Banerjee has set the ball rolling for a business jamboree--the 'Bengal Global Business Summit 2022'--to be held in April next year.
However, it would be pertinent to examine the reasons behind Bengal’s inability to attract big-ticket investors till now.
Bengal has not seen any big-ticket investment since Tata Motors Bengal a little over thirteen years ago. It hardly needs to be mentioned that Trinamool chief Mamata Banerjee was responsible for that departure.
But to blame Mamata Banerjee alone for Bengal’s failure to attract big-ticket investments would amount to missing the trees for the woods.
Yes, the Trinamool chief's intransigence over the issue--she insisted that all land that had been acquired for the Tata Motors' Nano plant be returned to the farmers-- that drove out the Tatas from Bengal has queered the investment pitch (perhaps permanently) for the state. But there are a few other factors that play a critical role in big investors' decision to give Bengal a wide berth.
Now that Mamata Banerjee has set the ball rolling for the next business jamboree--the grandly-named --to be held in April next year, it would be pertinent to examine the reasons behind Bengal’s inability to attract big-ticket investors.
This is perhaps Bengal's biggest handicap, and one that hangs like an albatross around its neck. Communists started gaining a foothold in Bengal since the pre-Independence days with a section of academia, journalists, litterateurs and even freedom fighters developing strong communist leanings.
After Independence, with the Congress ceding the academic space to leftists, the seeds of communism were sown into generations of young and impressionable students from an early age.
Communists started gaining major ground in Bengal since the mid-1960s and this started manifesting itself in social, political and industrial strife. Gradually, bandhs, hartals, strikes, disruptive processions and protests, and also violence, became an integral part of Bengal's landscape.
All this strife, especially trade unionism, led to industrial lockouts, closure of industrial units and flight of capital out of Bengal.
Even though communists were ousted from power in Bengal more than a decade ago, their legacy lives on. The communists have been replaced by Mamata Banerjee who, in many ways, is more left than the leftists.
She, and a large section of Bengal's populace--especially the ambitious lot who have not migrated out of the state--harbour strong anti-capital sentiments and are inherently suspicious and resentful of industrialists, who are looked upon as exploitative.
This attitude has been ingrained among many Bengalis through popular literature, films and other media over decades. That’s because most litterateurs, artists, film-makers and intellectuals, even the very distinguished ones, have been left-leaning. And that is why a large section of Bengalis resent 'capitalists'. It is no wonder that investors find the social and political climate in Bengal unwelcoming.
POOR WORK CULTURE:
This is the fallout of Bengal's left legacy. The communists, by encouraging irresponsible trade unionism, fostered a poor work culture. Workers in both the private and public sectors were encouraged to demand higher wages and more facilities while, at the same time, shirk work.
This irresponsible attitude was adopted by government employees who were organized into associations affiliated to the left, primarily the CPI(M). 'More pay for less work' and 'salary for coming to work, bonus for doing some work' (this popular slogan in Bengali was ‘ashte jete beton chai, kaj korte bonus chai’) became the credo of workers and employees.
The spirit of entrepreneurship among Bengalis fell victim to this spirit. Frequent left sponsored disruptions like 'Bangla bandhs' (often called over issues unrelated to the state) also bred an irresponsible attitude to work among people of Bengal.
Mamata Banerjee may have overthrown the left from power in Bengal, but her populism has led to further deterioration in the state's work culture. She has, for instance, increased the number of holidays for state employees and this has had a ripple effect on the private sector as well.
Given the mandate that she received, she could have easily effected a turnaround in this. But she has chosen to tread the path of populism for immediate political gains.
That's why big investors are wary of setting up mega and large labour intensive units in the state.
This is a direct fallout of the poor work culture in Bengal. Red-tapism and an indolent bureaucracy has been a major disincentive for fresh investments. Mamata Banerjee has, admittedly, been trying to set up a single-window mechanism for granting permissions and clearances to investors.
However, her efforts have been largely stymied by bureaucrats who have also sabotaged her efforts to streamline the lengthy process of granting permissions and clearances. Negotiating the bureaucratic maze in Bengal is something investors would rather not engage in, especially since many other states in the country do not suffer from this debilitating drawback.
Even in a few cases where the chief minister’s office (CMO), acting on express instructions from Mamata Banerjee, had succeeded in fast-tracking the process of granting clearances to investors, the babus succeeded in holding up the process of periodic renewals of clearances. Such tales travel fast in business circles and have, consequently, made many potential investors wary of setting up shop in Bengal.
EXTORTION & RENT-SEEKING CULTURE:
With unemployment rife, the communists who ruled Bengal for 34 long years since 1977 encouraged and even patronized extortion rackets and rent seekers.
'Syndicates' comprising local crime lords and CPI(M) functionaries mushroomed and flourished in all sectors of trade and commerce. Needless to say, these 'syndicates' have flourished under Mamata Banerjee’s rule because unemployment has only increased.
The 'syndicates' are a huge put-off for investors who, understandably, prefer to keep away from criminals. Though the state government has been assuring investors of protection from syndicates and extortionists, the fact remains that extortionists enjoy political patronage.
The Trinamool, like its Left predecessor, depends on many of them to stay in power. They play a critical role in 'election management'.
These syndicates are also the means of sustenance for many foot-soldiers and loyalists of the ruling party. And a sizeable part of the proceeds from their activities go into the ruling party's coffers.
Thus, there is an obvious lack of political will to crack down on the criminals who hold industrialists and businessmen to ransom in Bengal.
As stated earlier, though this scourge was introduced by the Left when it came to power in Bengal, it has continued and become worse under the Trinamool.
All these above-mentioned factors have played a major part in Bengal being deprived of any significant big-ticket investments. Added to these, of course, is Chief Minister Mamata Banerjee’s persona that inspires little confidence among investors.
A whimsical and imperial chief minister who is intolerant of contrary opinions, lacks a good record of governance, and hands out doles in return for votes even while bringing the state to financial despair cannot inspire much confidence among investors. And the state that she rules over also cannot be a safe and attractive investment destination.
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