Is perception about West Bengal as an investment destination improving?
Industrial investments in West Bengal (WB) were traditionally in sectors, such as leather, textiles, steel and iron, agro-based, and chemicals. In 1981, West Bengal accounted for 9.8% of the industrial output of India. In less than two decades, that figure fell by half, to 5.1%. The state in its bid to further economic development has since provided many incentives. This led to some flow of FDI in areas such as IT, tourism, telecommunications, and chemicals. Yet, despite all efforts by successive state governments, there has been practically no significant industrial development particularly since the Singur fiasco.
The Singur land was acquired by the Buddhadeb Bhattacharya government in 2006 to facilitate the Tatas to set up their Nano car manufacturing plant. However, due to prolonged agitation, the plant could not be set-up and finally in 2016, the Supreme Court set aside Calcutta HC order upholding the land acquisition for Tata’s Nano plant at Singur in WB. This led to a severe distrust between the state authorities and the prospective investors. It became a case of bad perception.
Many industry leaders and consul generals of various countries raise this perception issue about WB’s investment climate. The principal question is: Is perception about WB as an investment destination improving now? It may have because strikes and lockouts are no longer heard of in WB. Further, the Union ministry of statistics and program implementation has confirmed the economic growth rate of WB at 12.58%, one of the highest in the country. Capex has gone up 11 times and there has been a multi-fold increase in planned expenditure.
There is another confirmatory news that CII members have submitted Rs.5.5k crore worth proposals for investment in WB. They, mostly locally established companies, have given 58 business proposals across many sectors like steel, power, logistics, battery, infrastructure, engineering, food processing, packaging etc.
It is also understood from a UK delegation led by UKIBC that UKIBC has conducted a survey among its members and other companies about their preferences to invest in WB and about 25% gave such a preference positively. This delegation includes companies like Vodafone, British Telecom, RSM, CDC, PwC and Perno Rica and others and therefore the focus area appears to be telecommunication and services sectors.
There is also a news that Amazon is doubling storage space in state to make it the largest hub. It will run 5 fulfilment centres in WB enabling 10% of its Indian on-line logistics business and support customer demand for products like Smartphones, Consumer Electronics, Appliances, Fashion and Consumables.
There is news also that Trump Org is very much bullish about its project in Kolkata, Trump Tower on EM Bypass. It has 137 units in a 38 storied building, out of which 70% has already been sold.
Japanese firm Kawasaki Rikuso Transportation Company is investing in setting up of temperature-controlled solar powered warehouses for agro-product storage in West Bengal which can store vegetables of up to 30 tonne per day. They would install 100 solar-powered, temperature-controlled warehouses in West Bengal at an estimated cost of Rs 300 crore.
All the above show that there is recently a revival of interest in WB as an investment destination, even in the backdrop of the prevailing slowdown in the country. Hey, things seem to be looking up in WB and perception improving.
The writer is a long-standing commentator on contemporary issues.