Thirty Years of Left Front Government in West Bengal : A tryst with challenges and opportunities

Perspective
Ours is basically an agrarian economy. At the time of independence our state was one of the top states in terms of industrial growth. But the growth of industry in the state had suffered serious setback because of the policies pursued by the Central Government. The situation worsened further in the mid seventies. As a matter of fact, the policies followed by the Central Government since the 2nd Five Year Plan have negatively impacted on the industrial prospects of the state. The benefits of scientific inventions and technological innovations in the post 2nd World War phase hardly found their place in our national industrial policy-framework. Indias lack of access to the benefits of scientific and technological revolution compounded by uneven competition had, in fact, regressive effect in the Indian industries. The industries set up during the pre and post independence period also failed to meet the demand of the people. Its effect in West Bengal was more pronounced. On the one hand, agricultural growth had stagnated, and on the other hand, industrial progress had degenerated resulting in large- scale unemployment both in the rural and urban areas. In the process, a deepening socio-political and economic crisis engulfed the entire state.

Assumption of office by the Left Front Government: Unleashing of productive forces in the rural sector
The assumption of office by the Left Front Government in the State in 1977, however, brought about dramatic changes to the peoples socio-political life. The Left Front Government initiated land reform measures, distributed land to the tillers, ensured the rights of the Bargadars, enhanced the wages of the agricultural labourers and brought about structural changes in the socio-political formation in the rural areas in favour of the under privileged. It was a process of empowering the people and striking at the root of the exploitative feudal structure of the rural society. These measures unleashed the productive forces in the agrarian sector and placed West Bengal as one of the front ranking, agriculturally advanced states of the country in

the 80s. The production of rice in the early 80s was 68 lakh tones which reached to the tune of 148 lakh tones in 2004-05. As a result of redistribution of land and ensuring rights of the sharecroppers, the number of people living below the poverty line started declining very fast in comparison to other states in the country. It is to be remembered that when the Left Front first assumed power in the State, the total number of people living below the poverty line was around 60%. According to the latest figure published by the Planning Commission it has come down to slightly above 20%. The policy of the Left Front Government to accelerate the process of development of cottage and small scale industries also created new opportunities in the rural areas with rural youths finding new avenues of utilizing their potentials for gainful employment. Agricultural growth and development of cottage and small scale industries combined not only changed the face of rural Bengal but also brought about new power equations in the socio-economic domain. And the decentralization of power through Panchayat Raj System reinforced the determination of the people for exploring new avenues of growth and prosperity. The achievements of the Left Front Government over the last three decades essentially hinge on the Land Reform Measures and decentralization of power through Panchayet Raj system.

Determination for faster industrial development of the State

The Left Front Government was, however, conscious from the beginning that the overall development of the state was not possible if the development was confined only to the agriculture and allied sectors. What was required was a well-tailored policy to accelerate the process of industrial development of the state particularly in the context of the fast changing national and global scenario. It needs no further reiteration that the development in the agriculture sector essentially impregnates the prospects of development in the industrial sector. In fact, development in the two sectors is interrelated and interdependent. This is also how the civilization has progressed. Though Agriculture is in the State List of the Constitution, the State Government had to plan its development perspective in full appreciation of the constraints and limitations of the constitutional framework. In spite of these

limitations, the State Government have been able to ensure increase in the productivity of land and agricultural production through planned measures particularly by providing adequate support to the farmers, Bargadars and pattadars. The institutional support also come from the PRIs. In the industrial sector, there was remarkable achievement in the cottage and small industries and it is during the Left Front Government that the cottage and small-scale industries have recorded highest growth in the States history with thousands of people employed in this sector. It is necessary to note that prior to the introduction of New Economic Policy in the era of globalization that started gaining ground in the 90s, it was the sole prerogative of the Central Government to decide investment in the large and medium industries. Similarly, it was the discretion of the Central Government to decide the nature and size of industries to be set up as well as their possible locations. Our State Government, however, could realize at the very beginning that for making rapid industrial progress and to keep pace with the changes around the world to the benefit of the people, the State Government must have to take full advantage of the new technologies and the opportunities thrown open by the path-breaking scientific inventions. It was felt that emphasis must be given on heavy industries- particularly in the manufacturing and engineering sector, sunrise industries, petrochemicals, IT, Telecommunications, shipbuilding etc. to meet the demand and fulfill the rising aspirations of the people.

Constraints and limitations

It bears recall that when the Left Government came to power in 1977, West Bengal was a power-starved state. Adequate supply of power is basic prerequisite for both industrial and agricultural development of a State, and in absence of this basic facility it was virtually impossible to draw a roadmap for industrial development, let alone faster industrial growth. The Left Front Government identified power generation as the core area and decided to have a few Thermal Power Plants but the Central Governments step-motherly attitude towards West Bengal, as is well known, was the principal handicap to the states stride for industrial development. It

took nearly eight years to get clearance for commissioning Bakreswar Thermal Power Station. Development of Electronic Complex was not allowed because of West Bengals proximity to international border but Chandigarh had no difficulty to get it as it was not so close to international borders! It took 12 years(!) to get clearance for Haldia Petrochemicals Project. The policy of freight equalization and License Raj also proved disastrous for West Bengal. It lost competitive advantages even though it was the repository of coal and other basic raw materials for industries. The discriminatory policies of the successive Central Governments had severely affected West Bengals industrial progress. This long history of neglect, injustice and discrimination towards West Bengal is well known to all. It is also well known that movement against the Central Governments discriminatory policies including freight equalization and License Raj that hindered the industrial development of the entire eastern region had to be launched for the industrial development of the State. . Now, with the withdrawal of earlier restrictions on the flow of capital and predominance of market forces, the Left Front has no choice but to make full use of the opportunities for faster industrial development of the State to the benefit of the people. It also needs to be remembered that within the existing constitutional framework it is hardly possible for a State Government to pursue policies for industrial development of the State independent of the ones articulated by the Central Government. Nor is it possible in the present economic structure to usher in a progressive system at the instance of a State Government.

It needs to be recognized that the Left Front Government has to work under many compulsions. It would undeniably have been most ideal if the State Government could by itself make necessary investment in the industrial sector for overall development of the State, but given the financial limitations of the State Government in the existing constitutional system, it is hardly possible for the State Government to make investment. It must be recognized that in the new policy regime, the State Governments are increasingly pushed to a position where they will have little role in economic activities. Rather, the market forces will determine the policies to be pursued by the Government. It bears repetition to say that it is impossible for a state

Government to follow economic policies independent of the policy formulated by the Central Government in the present dispensation.

Labour-intensive industries versus capitalintensive industries : Shrinkage of job opportunities

Industries which are being set up now-a-days are capital-intensive. These industries do not create sufficient job opportunities as the labour-intensive industries set up in the past used to do. So, we witness a wide gap between the number of people losing jobs and the number of people getting jobs. The State Government lacks in financial resources to invest in industries. In such a situation, the State Government has to act decisively and create employment opportunities for the unemployed of the State. As per arrangements in our Constitution, the important areas of public service like agriculture, irrigation, roads, education, health, public health engineering, law and order etc are included in the State List. The areas which provide for generation of revenue, on the contrary, lie with the Central Government. It is, therefore, hardly possible for the State Government to make investment in industrial sector after discharging its responsibilities in the vital social sectors that involve huge public expenditure. In this background, the State Government has no other option than to invite private sector to invest. The State Government formulated its Policy Resolution on Industry in 1994 in full appreciation of these ground realities. The focus of the Policy is to attract both domestic and foreign investment in the areas where we have competitive edge. Similarly, it encourages FDI in areas which is beneficial to the State. Our State has now emerged as one of the most sought-after destinations for investments in the country. The stream of investment proposals that the State has received in the recent times is basically the result of the policy initiatives of the Government over the years in keeping with the basic spirit of our Policy Resolution on Industry.

Disastrous impact of New Economic Policy on the indigenous industries : State Government's interventions to combat industrial sickness
In the face of the policy of liberalization, privatization and globalization the basic tenets of the New Economic Policy introduced by the Central Government in 1991the traditional, indigenous industries were exposed to grave crisis. it was, however, an all India phenomenon but in West Bengal the onslaught had severe impact. The situation became even worse in respect of the industries both in the private sector and public sector which had already started becoming sick because of a variety of reasons including technological obsolescence, resource crunch, managerial

inefficiency and lack of ability to withstand stiff competition in the market. Thus, industrial sickness had surfaced as a major problem in the State. While carrying forward the industrial development of the State in the neo liberal economic scenario, the State Government had also to address the problem of industrial sickness that affected a sizable section of people of the State - directly and indirectly. To cope with the problem the Industrial Reconstruction Department of the State Government, notwithstanding its limited resources, took major initiatives for meaningful reconstruction/revival of the sick industrial units in the State.

During the current year up to November 2007, this department has interfaced in cases of industrial sickness of 335 cases registered with BIFR from this State. This includes 25 Central Undertakings. Out of these 25, implementation of revival packages has been successfully completed in 3 units against 13 cases so far approved by BIFR. Remaining 10 units are either at various stages of implementation of their respective revival packages approved by BIFR or their revival scheme having failed is being revised. Revival packages are in process of finalization in 2 cases. BIFR has recommended winding-up in respect of 10 units. . However, some of these are going to be revived by GOI itself either on their own or through JV partners. After prolonged struggle, IISCO has been merged with SAIL and modernization of it has been started. This Department has coordinated approvals to the support of

appropriate relief/concessions to the units, which are being revived through implementation of their respective revival-schemes approved by BIFR.

Out of 310 cases in private sector, respective revival schemes for 62 units have been approved by BIFR so far. 22 units have been revived till now. Implementation of respective revival schemes of remaining 40 units is either in progress or under revision as their original BIFR-schemes have been decided as have failed. Various options towards revival measures in respect of 107 cases are under consideration of BIFR. 52 units have been decided for final closure by the Honble High Court, out of 65 units recommended for winding-up by BIFR. Some prospective promoters, however, have evinced interests for taking over some of these closed units. State Government has granted support of appropriate relief/concessions to all the units, which are being revived through implementation of their respective revival-schemes approved by BIFR.

The State Government in the Industrial Reconstruction Department has also declared status of Relief Undertaking to 16 ailing industrial units during the period in order to protect these industrial units from winding up against moved/initiated by some of their old unsecured creditors. proceedings

Again, the State Government has planned a pro-active agenda for providing incentive and support to the renewal of ailing industrial assets in the State because it believes in vibrant industrial growth, and to achieve this objective the State government is determined to harness its full strength. The State Government has also decided to continue with the West Bengal Industrial renewal Scheme (WBIRS) 2001. Introduction of a new scheme to provide necessary support measures to eligible ailing industrial units as required for their revival is also being contemplated

Public Sector Restructuring : An alternative to dismantling and disinvestment

So far as the State Public Sector Enterprises (SPEs) are concerned, the State Government had to take a major policy decision of restructuring them in full appreciation of the ground realities. Since the State Government could hardly afford to put undue pressure on its scarce budgetary resources for bearing the burden of the chronically loss making SPEs in preference to more important social sector commitments. The Government accordingly decided to take up a programme of restructuring of all loss making State Public Enterprises (SPEs). The first phase of this restructuring programme started during 2003-04.

This restructuring exercise is based upon the following principles. Units that could be made viable with financial and manpower restructuring and a moderate amount of investment have been restructured under Government ownership Units that required infusion of technology, large investment and operational flexibility were converted into joint ventures by inducting a strategic partner through a transparent process Units that were structurally unviable due to obsolescence of product/technology and such other reasons were closed.

Financial restructuring involved measures to clean up the balance sheets so as to enable the restructured units mobilise resources from commercial banks. Outstanding Government loans were converted into equity as necessary. Manpower restructuring involved the offer of early retirement to workers in order to reduce the staff cost to manageable levels. The extent of both financial and manpower restructuring was based on expert recommendations made after in-depth studies of the units. That the restructuring policy has yielded dividends is evident from the performances of the units retained under Government control. Table 1 below shows the picture. 8

Table 1 - Performance of retained and restructured units

(Rs. Lakh) Sales Name of unit 2004-05 3221.99 7520.18 254.66 648.31 2005-06 3518.61 7858.56 921.22 757.53 2006-07 (Provisional) 3324.99 9082.25 1306.73 1420.00 2004-05 264.43 18.48 353.77 46.03 Operating Profit 2005-06 513.92 48.49 41.91 24.03 2006-07 (Provisional) 259.24 * 22.43 144.35 138.00

Durgapur Chemicals Ltd. Westinghouse Saxby Farmer Britannia Engineering Ltd. Gluconate Health Ltd.

* Lower operating profit mainly due to rise in cost of inputs. Of these four units, Durgapur Chemicals Ltd has made net profits in 2004-05, 200506 and 2006-07 (unaudited).

Four other units have been converted into joint ventures. Performances of these joint venture units as shown in the Table 2 below have also improved significantly.

Table 2 : Performance of joint venture units

(Rs. Lakh) Name of unit Investment by SP Change in employment
200405

Sales
200506 2006-07

Operating Profit
2004-05 2005-06 2006-07 (Provisional)

Engel India Machines & Tools W. B. Chemicals Ltd. Great Eastern Hotel Bharat Jute Mills

180.35

168 + 130 57 + 50

206.58

40.82

4577.63

192.01

88.06

143.53

101.70

111.53

144.06

272.18

175.77

55.07

New Hotel under construction Handed over on 20th April, 2007

Apart from the 8 units mentioned above, 21 units were found unviable and closed. The State Government, while implementing the restructuring policy, has given highest priority to the protection of the legitimate interests of the workers and employees of the units under restructuring process. Appreciating the hardship and trauma of the workers and employees losing jobs, the State Government introduced an Early Retirement Scheme (ERS) that seeks to compensate these employees. This scheme comprises two basic components as below:

Monetary compensation
An Ex-gratia compensation at either of the following two rates as opted for by the worker (a) One and half months emoluments at the level currently drawn, for every completed year of service or part thereof, or (b) 35 days emoluments at the level currently drawn, for every completed year of service or part thereof plus 25 days emoluments at the level currently drawn for every remaining year of service or part thereof.

While the first option seeks to protect the interests of older employees who have put in longer tenures of service in the enterprise, the latter seeks to safeguard the interests of younger employees who have worked for comparatively lesser periods in employment of the enterprise and have substantial residual tenures.

In addition, the employees are entitled to the normal retirement benefits like Notice Pay, Leave Encashment, Gratuity and Provident Fund. The State Government also formulated a Social Security Package to ensure the social security of the employees taking ERS.

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The two Social Security measures extended to these employees are (a) Medical and accident/disability insurance The employees will receive reimbursement of hospitalisation expenses for themselves and their spouses either for medical treatment or on account of accident/disability upto Rs 50,000 per annum in either case up to the age of superannuation i.e., 60 years. The insurance provided by the Government of West Bengal is in many ways unique. The compensation package offered by the Government of India or other States, do not provide similar measures.

(b) Social Safety Net Programme (SSNP) Under this programme, employees facing displacement are trained to acquire a new skill to facilitate their self-employment or re-employment in some other organisation. Employees who are incapable of taking such training are allowed to nominate a dependent daughter or son.

Of the 6147 workers who have opted for ERS so far, 2480 employees have availed of this training themselves or sent their nominees to attend. As a result, 818 workers have been rehabilitated of whom 439 have chosen self-employment.

The State Government believes in vibrant growth of public sector in the core areas and is totally opposed to dismantling and disinvestment. The Policy it has been following is to give the public sector fresh lease of life through measured initiatives, expose them to the market realities and encourage them to become self-sustaining in competitive environment.

Focus on the SME sector : Engine of economic growth

In the State's industrial development process, the State Government lays emphasis on steady development of micro, small and medium industries alongside large industries. Equal emphasis is given on khadi and village industries, handicrafts and sericulture development, handloom and textile sector, hossiery and garment

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industries with an eye to employment generation. The intended development is sought to be achieved through cluster and catalytic approach. It is important to note that the cottage and small scale industries play very significant role in the economic growth of the state. Almost 90% of the industrial units in the state are in micro and small enterprises sector, which accounts for nearly 45% of the states industrial production and 40% of the exports from the state. In terms of employment generation, the micro and small enterprises sector occupies the second place in the state only after agriculture. The share of industry (manufacturing) in the Gross State Domestic Product is 16%.

There are about 900419 micro and small scale enterprises in the state providing employment to 25.22 lakh people. In terms of the number of units, our state occupies the 6th position in the country with 7% share of total industrial units in the sector. In terms of employment generation our state occupies the 2nd position in the country accounting for 9% of the total employment in the sector. Recent study by the GOI has shown that the number of unorganized manufacturing units in the state is highest among all states in the country which is around 15.07% and the employment it generates is 15% of the country as a whole. The State Government has also taken initiatives to develop micro enterprises through Self Help Group (SHG) model. The State Government seeks to integrate the whole process of industrial development for realising its vision of economic growth at an accelerated pace. The State Government has, therefore, laid special emphasis on development of SME sector at a faster pace.

Present Economic situation of the State

The policy pursued by the State Government over the last more than three decades has already started yielding positive results. Today the economy of the State is in a comfortable position. The SDP of West Bengal (Rs. 2,06,881 crore) is the third highest in the country after that of Maharashtra ( Rs. 3,71,877 crore) and Uttar Pradesh (Rs. 2,35,678.32 crore) It is growing at an average rate of 11% and is expected to be around Rs. 25,000 crore by the end 2007-2008. Agriculture as the primary sector

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constitutes about 24% of the SDP and it has been growing at the rate of 3.2% . The secondary sector comprising of the industries constitutes 21 % of the SDP and it is growing at the rate of 12% - 12.5%. Within this sector the manufacturing sector has registered growth of more than 9%. The contribution of services sector to the SDP has been about 54% and has registered a growth of 12% within which construction component has grown at the rate of nearly 20%. Based on these achievements, West Bengal is now on a steady and balanced integration mode between the vibrant agricultural economy and emerging sectors of modern industrial economy.

Enabling Policies
As already stated the State Government is keen to have foreign direct investment (FDI) in different sectors particularly in the infrastructure, Health, Tourism, etc. The State government's declared policy to attract more Foreign Direct Investment (FDI)., however, essentially hinges upon mutual advantages. The State Government have put in place the following enabling policies to accelerate the process of industrial development These policies apart , social stability and political continuity have helped the State to be on the on a fast forward mode.

Policy Measures of the State Government for steady economic growth Biotechnology Policy IT Policy ITeS Policy Mines and Mineral Policy PPP( Public Private Partner ship Policy) Housing Policy Tourism Policy Incentive Policy, 2004 Export Policy

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Thrust Are as for i ndus tr ial de vel op ment

The State Government, after taking into consideration the potential areas and prospects of industrial development in different regions of the state,

identified the following key sectors as thrust areas/Identification of the thrust areas and attracting investment to these sectors are guided by the State Government's policy of balanced growth, creating more and more job opportunities, reducing regional disparity and to ensure improvement of the quality of life of the people on a sustainable basis.

Thrust Areas
Chemicals and Petrochemicals and downstream Iron & Steel and downstream Automobile Shipbuilding Agro based industries Fruit Processing, Horticulture & Floriculture Advanced Food Technology IT & Knowledge- based Technology (Hardware and Software) Bio-technology: Pharmaceutical and Agriculture Textiles, Jute, Yarn and Fabrics Leather and Leather goods Rubber Tourism Health care facilities Mines and Minerals Gas Gems and Jewellery Industrial and social infrastructures

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Why investors have been looking towards West Bengal as the most sought after destination for investment: Key advantages that West Bengal offers
The policies pursued by the State Government have brought about significant changes in the socio-economic life of the people of the State and created new aspirations. In the process, strong demand has been created for modern consumer goods and other products. This internal market has acted as a boost for industrial development at a faster pace. Besides, the following intrinsic strengths of the State have stood in good stead. Investor-friendly Government Strategic geographical location Natural gateway to domestic markets in eastern India, the North East and countries of Nepal and Bhutan Connected to the growing and lucrative markets in South East Asia, the Far east and Australasia Vast Talent Pool and literate, & skilled workforce with modern outlook at competitive costs Good social and physical infrastructure including world class B Schools Universities and Technological Institutes Lowest rate of attrition Strong agricultural base with a vibrant rural economy Highly developed telecommunication facilities and availability of power at competitive tariff Lowest living cost Kolkata is the cultural capital of India

State Governments focused initiatives

The State Government considers the Chemicals and Petrochemical sector to be a highly promising sector in the context of national and global demand for

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chemical and petrochemical products. The potentials for growth of this sector have further brightened following the selection of the Haldia region by the Government of India for setting up Petroleum, Chemicals, Petrochemicals Investment region (PCPIR). The Project envisages setting of industrial clusters both in the large and SME sectors, development of industrial infrastructure including up gradation of Port facilities, road and rail connectivity, development of social infrastructure, setting up of Training Institutes, Vocational Training Centres, creation of irrigation facilities for newly developed agricultural land. Setting up of Greenfield Airport, Deep Sea Port, IT Parks development of

modern Townships across the State as a step towards improvement of investment facilities and in the process improvement of the quality of lives of the people of the State form part of the State Government's development perspective. With West Bengals strong base in the traditional industries and excellence in manufacturing sector it is the policy of the State Government to ensure vigorous growth of this sector as well as to help the State emerge as a steel manufacturing hub. A large number of proposals in this respect are already in an advanced stage of taking concrete shape. The proposal of JSW Steel (Jindal Group) to set up a 10 Million tonne Composite Steel Plant at Salboni in Pachim Medinipur with an investment of Rs. 35, 000 crore in the next 10/12 years, the proposal of Jai Balaji Group for setting up an integrated Steel Plant in Raghunathpur of Purulia district with an investment of Rs. 18,000 crore and the proposal of Bhusan Steel for setting up a two-million tonne capacity steel plant and 1000 MW captive power plant with an investment of Rs. 10,000 crore are worthy of mention in this connection.

The State Government has also decided to set up sector-specific parks with world class infrastructure, common facilities, state of the art pollution control measures and modern amenities. The setting up of Leather Complex, Foundry, Rubber, Chemical, Plasto Steel Park, Automobile components Park, Light Engineering 16

Park, Polymer, Garments, and Jute Parks are some of the steps directed towards this end. Moreover, setting up of Industrial Parks in different locations of the State are the initiatives aimed at ensuring dispersal of industrial growth and reduce regional imbalance. But, while selecting the location for the Growth Centres/Industrial Parks the State Government follows the policy of harmonizing different factors like choice of the industrialists, Governments

priorities and peoples needs. That the congenial industrial climate of the State has already created visible impact is evident by the fact that 221 Projects have been implemented in the State during 2006 involving an investment of Rs. 3436.15 crore where employment opportunities have been created for about 25394 people. These figures exclude investment in the Power, Housing, Infrastructure, SME sectors. If all these sectors are taken into consideration the total investment will exceed Rs.10,000 crore. Besides, a large number of proposals in different core sectors like Power, road infrastructure, cement , iron and steel , automobile, involving several thousand crore of rupees are in the pipeline. It is important to note that from January 2001 to December 2006 the total number of projects implemented in the State stands at 930 involving total investment of an amount of Rs. 1,50,051.21 crore creating direct employment opportunities for 1,18,901 people. An analysis of the sectorwise investment shows that iron & steel industries received maximum investment followed by food processing industries, engineering industries etc. The Tables that follow will give a glimpse of the State Government's continued and relentless efforts for faster industrial development of the State.

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Table- 3 1991-2006 : IEMs thus far filed a comparative study of West Bengal, Gujarat and Maharashtra and Uttar Pradesh

Name of the State

No. of IEMs filed

Investment as per IEM (Rs. crore)

Employment opportunity as per IEM

No. of IEMs implemented

Actual investment (Rs. crore)

Employment

Investment ratio

Gujarat Maharashtra Uttar Pradesh West Bengal

8296 12531 6101

364712 303143 156032

1395654 2081886 1462838

1125 961 508

70588 29106 19441

157094 161246 79735

19.35 9.60 12.46

3887

88181

654388

475

28963

81917

32.84

(Source: DIPP, Government of India).

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Table - 4 Total no. of projects implemented from 1991 to 2006

Investment (Rs. crore)

Year

No. of implemented projects

Employment

1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 Total

26 58 41 37 15 40 35 49 95 63 86 113 137 196 227 221 1439

84.36 493.25 548.43 4831.55 251.21 665.79 556.74 537.24 1871.98 7740.11 2194.54 2325.95 2335.19 2243.80 2515.58 3436.15 32631.87

767 4017 4932 19752 2367 4770 3548 4695 8735 8821 9653 19491 10772 26070 27521 25394 181305

(Source: Annual Reports(2005-2006, 2006-2007) of the Commerce and Industries Department, Government of West Bengal)

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Table-5

Details of the companies in the large-scale industrial sector who have signed MOA/MOUs with the Government of West Bengal from January, 2001 to November,2007 for investment
Sl No. 1. Name of the Company Adhunik Corporation Limited Bhusan Steel Particulars of the project with location 1.1 MT Steel plant with power and cement units at Raghunathpur, Purulia. 2.0 MT Steel plant with 750 MW power unit at Salanpur, Barddhaman Refinery at Haldia, Purba Medinipur. 2.0 MT Steel plant with 850 MW power unit at Jamuria, Barddhaman. 5.0 MT Steel plant with 1250 MW power and 3.0 MT cement units at Raghunathpur, Purulia. 10 MT Steel plant with 1300 MW power unit at Salbani, Paschim Medinipur. 3.0 MT Cold Rolled Steel plant with1200 MW power unit at Jamuria, Barddhaman. Two wheeler manufacturing unit at Uluberia, Howrah. Industrial and domestic gas Small car unit at Singur, Hooghly. Met coke and power plant at Haldia, Purba Medinipur. Earth moving vehicle manufacturing unit at Kharagpur,Paschim Medinipur. Investment (in Rs. crore)

6400.00

2.

8000.00

3. 4.

Indian Oil Corporation JAS Infrastructure (Abhijeet Group) Jai Balaji Group

29750.00 10800.00

5.

10500.00

6.

JSW SteelJindal Group

35000.00

7.

KAIL - Videocon

15000.00

8. 9. 10. 11. 12.

Mahabharat Motors RIL Tata Motors TISCO TELCON

1000.00
Being worked out.

1000.00 700.00
Being worked out.

(Source: Report of the Commerce and Industries Department, Government of West Bengal)

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Table-6 Sector-wise Investment in the pipeline on the basis of assurances from the various Industrial Groups
Proposed investment (Rs. crore)

Sl. no. 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. Steel

Sector

56400 52229 29750 26000 13000 3000 1950 1000 800 300 184429

Real estate Oil Power Gas Retail IT Electronics Cement Aviation Total

(Source: Investments in West Bengal, January-November, 2007-ASSOCHAM report of November, 2007)

State Government's focus on development of physical infrastructure : Basic prerequisite for accelerated pace of industrial development
Development of infrastructure sector is basic prerequisite for accelerating the pace of industrial development. This sector also demands increased private investment because Government resources are limited. Private Public Partnership (PPP) Policy has, therefore, been formulated as an ideal tool for partnership towards improvement of the physical and social infrastructure of the State. 21

The State Government has taken up some important projects in the infrastructure sector like 4-laning of NH 41 from Kolaghat to Haldia, NH 31 passing through North Bengal under the Silchar Porbandar East-West Corridor Project, NH 117 from Kona to Netaji Subhas Docks, NH 35 from Barasat to Petrapole and NH 31 from Kolkata to Dalkhola. Upgradation of NH 34 to 4lane status is very crucial to the improvement of road connectivity because it connects Kolkata and South Bengal to North Bengal. The State Government has also decided to take up a Greenfield project Eastern Link Highwaystretching around 100 KM to connect NH 31 from a point up to Usti on NH 117 and from Usti to Raichak. From Usti upgraded NH 117 would provide the link to Namkhana, while from Raichak the new road would be connected to Haldia by a bridge over Haldi River to Kukrahati. To keep pace with the development worldwide we have felt the need of building modern Townships. In Howrah, Asansol, Durgapore, Burdwan, Siliguri, Bolpur and in other places of the State, new Townships with modern facilities are coming up. Rapid progress of work at New Town at Rajarhat, close to Salt Lake, is all set to change Kolkata's skyline. In this New Town we are going to set up an International Convention Centre on a 100-acreplotof land with world class facilities that will meet the demand of the Corporate World. A permanent Trade Fair Ground on the E.M.By-Pass close to the Science City is also coming up. Setting up of a deep sea port and modernization of the Netaji Subhas Chandra Bose International Airport will also significantly improve the States infrastructure. With such improved infrastructure in place, there will be a spur in economic activities across the state leading to generation of employment opportunities on the one hand and minimizing the regional imbalances and socio-economic disparities on the other.

H ar monisatio n of traditional se ctor with sunrise se ctors

The State Government lays emphasis on perfect harmonization of the traditional sector and sunrise sector, fusion of indigenous knowledge with highly advanced

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modern technology, development of large scale industries and ancillary industries with focus on SME sector, rejuvenation of labour-intensive industries alongside development of knowledge-based industries. A recent Survey of the CII and E & Y has also found this policy crucial to the growth of the SME sector which significantly contributes creation of more and more employment opportunities.

State Government's focus on automobile sector

The State Government feels that the automobile manufacturing sector is pregnant with immense possibilities and it has, therefore, laid emphasis on development of this sector. It has also been noticed that there has been a significant growth of the automobile industry in India in the last decade. The industry is already contributing 4.8% of national GDP, and the percentage is expected to rise to 6.8% by 2010. Almost the entire growth in this industry in the last decade has been concentrated in Maharashtra, Haryana and Tamil Nadu. No new unit has come up in West Bengal. The Government of India has already declared its policy to make India a hub for the manufacture of automobiles. In view of the State Government has redoubled its efforts to attract investment in this sector. The efforts of the State Government have yielded positive results when Tata Motors Ltd. (TML) came forward with a proposal to the State Government for setting up a manufacturing Plant for Automobiles including their proposed new product the Tata Small Car recently launched as NANO . The proposal of TML envisages manufacture of initially 2,50,000 cars per annum with a future plan of expansion of capacity. It also entails an investment of over Rs.1,700 crore besides investment of over Rs. 500 crore more for support to the Vendors. The process of land acquisition having been completed and the land being in possession of WBIDC, an Agreement between the Tata Motors Ltd., Govt. of West Bengal and West Bengal Industrial Development Corporation (WBIDC) has been signed on 9th March, 2007. Mahabharat Motors Manufacturing Company Private Limited, a joint venture of the Salim Universal Success, has also been setting up their factory for two-wheelers in Uluberia, Howrah. Global Automobiles Pvt. Ltd 's (Xenetis Infotech) two-wheeler project at Kamdevpur in the district of Hooghly with 23

an annual production target of

3,07,000 motorbikes has already been

commissioned. Similarly, Ural India Ltd. who have set up their factory in Bhabanipur, Haldia , in Purba Medinipur district have started production of Heavy Motor vehicles with an annual production target of 5,000 vehicles.

Land Use Policy : Challenge of Industrialization process in a land critical State

The State Government is firm in its commitment to steadily go ahead with the ongoing process of industrial development of the State as it believes that with rapid industrial development of the State it is virtually impossible to strengthen the State's economy and ensure gainful employment for the millions of unemployed both in the rural and urban areas. It also needs to be recognised that West Bengal is a land critical State. It has only 2.7% of the total land area in the country with more than 8% of the Indian population. Out of the total land area in the State 61.9% is agricultural land, 13.5% is forest land, 5.0% is fallow or uncultivated land and 19.6% are urban areas. The projects in pipeline involving large investments in manufacturing sector for setting up of modern and environment friendly production facilities will require large tracts of land. Moreover, it is always not possible for every industry to locate in a particular site. Decisions regarding location are based on a number of factors. In addition to availability of land, quality infrastructure in terms of road and rail connectivity ( as well as proximity to a port for many industries), adequate supply of water and power, as well as proximity to markets and urban centers are required for successful implementation of projects within a definite time frame. In order to avoid the complicated process of purchase of land from a large number of owners and compliance with existing land laws of the State especially pertaining to land ceiling it may be necessary for the State Government to acquire the land required to set up industries. Since the State Government wants to take full advantage of the unfolding opportunities to the benefit of the people of the State , it has to move at a faster pace in regard to identification of land for industrial use To minimize usage of

agricultural land for industrial use and to achieve a balanced and sustainable

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industrial growth, the State Government is seeking to implement a policy for location of industries in a manner so as to maximize use of uncultivable land, locate industries in backward areas of the State, develop industrial clusters thereby using common infrastructure and optimizing available resources. The State Government has started conducting a field survey on the vested land available as per records and assessing its viability for industrial usage keeping in view its size, location, contiguity and availability of infrastructure. The State Government is also trying to use the land locked up in closed and sick industries keeping in view the legal issues and other complications. Moreover, in order to create a balanced and sustainable industrial growth in the State and maximize use of uncultivable land in the State, it is felt that some parts of the State can be identified as industrial growth poles, because of factors such as availability of non-agricultural land, tradition of industrial growth and availability of good infrastructure. This will mean optimal use of the existing industrial infrastructure, and upgradation of infrastructure where required, and facilitate/create new industrial infrastructure for projects in backward areas. The State Government, therefore, seeks to develop a few areas as focal areas of industry such as (i) Haldia, (ii) Asansol-Durgapur and contiguous areas of Bankura and Purulia across the Damodar River; (iii) Greater Kolkata which include parts of North and South 24 Parganas along with Howrah and Hooghly; (iv) KharagpurJhargram; (v) Siliguri-Jalpaiguri; and (vi) Kalyani. At the same time, it is also proposed to develop small industrial clusters in all districts of the State to meet the requirements of the SME sector and to create employment opportunities in all districts. The State Government is fully conscious that in an agrarian economy a very large number of people have to be totally dependent on agriculture and allied sectors. It also remains a fact that land in most cases is the only means of livelihood of this vast section of people. It is, therefore, the policy of the State Government to find out land, preferably nonagricultural, fallow and wasteland, in different parts of the state for locating the new industries without hampering the basic interests of the farmers, bargadars, agricultural labourers and others solely dependent on land for their livelihood. It is also the policy of the State Government to protect the interests

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of the farmers and land losers The State Government in the Department of Land & Land Reforms has, therefore, in consideration of the requirement of land for industrial purpose and issues integral to it formulated a comprehensive compensation and rehabilitation package for those whose land will be acquired for setting up of industries. The salient features of the package include payment of compensation at the higher side of the prevailing market rate depending on the character of the land and payment of 25% of the total land value to the bargadars , rehabilitation of the families whose dwelling houses are affected by acquisition in alternative location(s) as close to the original place of residence as possible at Government cost, creation of facilities for alternative livelihood, imparting technical and vocational training to the land losers and/or eligible dependent members of his/her family for skill development as a means to opening avenues for gainful employment and sustainable livelihood, development of wasteland for agricultural purpose and creation of irrigation facilities for heightened agricultural activities, setting up of vocational /technical institutes and creation of other social and physical infrastructure including healthcare facilities for sustainable development of the hinterland of the economic zones created for industrial clusters .

Vision of the State Government

In the context of the unfolding realities in the present scenario, it is the policy of the State Government to take full advantage of the opportunities, maximize its efforts to harness the states potentials for rapid economic growth, utilize the benefits of scientific and technological innovations and help the state emerge as a front ranking industrially developed state of the country towards reaching the goal of sustainable development. And the whole process is based upon inclusive development strategy and shared commitment.

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