Pratim Ranjan Bose
CPI(M)-led Left Front came to power in 1977 riding on the most
irresponsible labour movement (with Jyoti Basu at the forefront), that took the
shape of an anti-industry movement and sent capital packing from Bengal. The
irresponsible agitations continued through 1980's and the state, which was
headquarters of most of India's blue chips, became a graveyard of industries.
The hardliner finance minister Ashok Mitra contributed in the process.
As Chief Minister Jyoti Basu wanted to make amends, Mitra fell apart and
eventually resigned. But by that time no industrialist believed in CPI(M) and
the state was in the grip of some crony capitalists and traders. On top of all,
the fanatics in the party prevented West Bengal from welcoming PV Narasimha
Rao-led liberalisation in 1991 that actually addressed some policy issues (like
freight equalisation) in Bengal's favour. West Bengal came out with an
industrial policy to take advantage of the liberalisation in 1995.
Veteran Leftist Parliamentarian Somnath Chatterjee was Jyoti Basu's
man-Friday during this period. As a top corporate lawyer, he used his influence
to make top industrialists visit the state, if not investing in it. If one may
remember CII held two gala industry meets in Kolkata during the period. Mukund
Ispat proposed to take over sick private sector steelmaker IISCO. French
hotelier Accor wanted to acquire Great Eastern Hotel. The Frankenstein created
through labour movement and party fanatics foiled both the efforts.
But some changes started brewing. The dingy WBIDC office was remodelled
to suit corporate tastes, under Chatterjee's leadership. As big capital was not
keen, he initially depended on investments by the local crony capitalists. Most
of them did invest in sponge-iron if I remember correctly. Tatas also invested
in Tata Metaliks during the period. Initially, the quantum of actual
investments was very small, in the range of Rs 50-60 crore a year, but they
created foundations for a new beginning. To the dismay of fanatics, the CM of
the State was found hobnobbing with capitalists. In next five years, actual
investments reached around Rs 250 crore a year. Purnendu Chatterjee’s Haldia
Petrochemicals and Mitsubishi Chemical’s PTA Plant (then largest Japanese FDI
in India) were the two biggest achievements of the period.
Jyoti Basu relinquished position to Buddhadeb Bhattacharjee in 2000.
Chatterjee became speaker in Lok Sabha 2004. But, the trend set by him
continued to gain momentum. By 2005, the average actual investments in Bengal
rose to Rs 2000-2500 crore a year with big industrial houses describing West
Bengal as a preferred destination.
We all know that the trend didn’t last long. The red fanatics and the
Frankenstein of anti-industry movement did strike back through Mamata
Banerjee’s Trinamool Congress by 2008. The exit of Tatas from Singur created
ripples and big capital fled miles away. Barring a few big projects - IISCO
modernisation by SAIL, Durgapur Airport City project or the defunct urea plant
of Matix – which were initiated before or around 2008; the rest scrapped their
investment plan in Bengal. They didn’t come back. They are unlikely to come
back anytime soon.
We now get barely Rs 300-700 crores actual investment a year in the industry
through smaller and less capital intensive ventures. (I am not taking into
Reliance Jio’s optic fibre laying into consideration. They created such a
backbone in the entire country.) The good news, if any, is there have also been
some acquisitions in petrochemical downstream in the very recent past.
But in this mêlée, a few things changed in Bengal. In the mid-1990’s,
when Chatterjee was trying his best to turn the rusted wheel of
industrialisation in Bengal, he convinced Basu to sign many memoranda of
understandings (MoU), or preliminary agreements, worth thousands of crores.
These were very fictitious figures of prospective investments, most of which
never saw the light of the day. Entering MoU is a common practice in India,
probably out of political compulsions to create a visibility and feel-good, which
is important to attract investment. Across the country, only a fraction of MoUs
are converted into actual investment. The conversion rate has always been lower
for Bengal for understandable reasons.
But those big bang announcements of MoUs, vis-a-vis the grim realities
of mid-1990’s, fetched Chatterjee a nickname. He was mocked by newspaper
editorials as ‘MoU-Dada’. Chatterjee was so unhappy about it that he used
to end press conferences in a huff if anyone asked about the actual investment
in Bengal. For a big man with a towering personality, his visible discomfort to
such questions, was a source of amusement to city reporters, like me.
And, that's the biggest change that struck today’s media. When the
current Chief Minister Mamata Banerjee or his finance minister Amit Mitra, make
announcements of prospective investments running into tens of billions of
dollars after industry meets, no one laughs at them. In fact, no one asks them
questions, which they consider “unacceptable” – a big change indeed.
Chatterjee passed away today at the ripe age of 89. He was 10 time MP
and Speaker of the Lower House in Parliament from 2004 to 2009. He was expelled
by Party for fulfilling his constitutional duty (during a no-confidence call
given by the party) in 2008. He was an accomplished man but a lonely man during the last few years.
I didn’t meet him for years. Don’t know how he rated us in media,
our change of heart to today’s politics and its tall claims of
industrialisation of Bengal.
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