New Delhi/Calcutta, Aug. 31: Atal Bihari Vajpayee will be happy to learn that Bengal’s economic report card looks better than it had appeared one-and-a-half months ago when he wondered what had gone wrong with the state.
Bengal ranked second — after Gujarat — in terms of actual domestic — excluding foreign — investment in 2002-03. This time, don’t question the figures, Prime Minister, because they have come out of a central department — commerce and industries.
Investments made in the year stood at Rs 1,422 crore, behind Gujarat at Rs 1,938 crore.
After Vajpayee questioned why Bengal dropped from pole position to the rear in the presence of chief minister Buddhadeb Bhattacharjee at the 150th anniversary celebration of the Bengal Chamber of Commerce, an angry state government struck out at the Prime Minister, attributing political motives and trotting out figures speaking of a healthier economy.
At times, experts have doubted the accuracy of figures compiled by the state’s finance ministry.
With Vajpayee’s own government now releasing data that shows some resurgence of investment, Bhattacharjee may feel himself vindicated, though one swallow does not make a summer.
Only in the previous year, Bengal was ranked 10th with a capital inflow of Rs 714 crore. Talk of a turnaround can be justified if last year’s high figure holds for some time.
“The data is surprising as one doesn’t find industrialists who are bullish about the state. It can be pent-up investment exploding in a particular year,” said an economist.
Somnath Chatterjee, the chairman of the West Bengal Industrial Development Corporation who had despatched a strong rejoinder to the Prime Minister’s July 16 lamentation, would hear none of this. “The findings explain the inherent strength of West Bengal, which we have been mentioning for some time,” he said.
Now, the bad news. Foreign investment is pathetic — Bengal takes the ninth position with an inflow of Rs 132 crore in comparison to Maharashtra’s Rs 4,865 crore, ranked first, followed by Delhi at Rs 2,994 crore.
Senior state officials traced Bengal’s better show in domestic investment to a surge in activity in iron and steel, plastics and chemical industries. Ironically, these are not quite the government’s focus industries — infotech and agri-business are where Bhattacharjee thinks the action should be.
There is obviously a mismatch between the wish list and reality.
State officials claim the Centre’s data does not reveal the full picture, which is even rosier. The secretariat of industrial assistance, a wing of the commerce and industries department that collects the data, does not take into account investments if companies do not inform it after starting production.
They said investment was Rs 2,326 crore in the calendar year 2002 and was around Rs 2,000 crore for the past four years.
“About 30 to 40 per cent of the new investments are in iron and steel and most are small and medium enterprises. Most of them are operating in Durgapur, Asansol, Purulia and Bankura. They are doing well and some are expanding,” said Gopal Krishnan, managing director of the corporation.
Aditya Jajodia of the Jai Balaji Group — among the first to set up a sponge iron unit — confirms this. “We had put in around Rs 50 crore in the past four to five years. We are investing Rs 175 crore in another plant and Rs 70 crore in a captive power plant.”
Bigger players like Tata Metaliks and Electrosteel Castings are also ready to invest, government sources said. As an industry, iron and steel has hit a purple patch.
With manufacturing — the state’s traditional strength —showing signs of growth and the Centre’s data-sheet admitting that Bengal is ahead of its bogey-states like Karnataka and Andhra Pradesh, the mood at Writers’ Buildings is upbeat and initiatives are being drawn up to promote iron and steel in north Bengal.