A government is only as good as its policies. There is much to commend in Mr Arjun Munda?s attempts to woo investors to Jharkhand. The problem is that even the best efforts of an energetic chief minister are no substitute for policies that shape investment decisions. Mr Munda may justifiably feel good about talks with Mr L.N. Mittal, the owner of the world?s largest steel empire. But, he will ultimately have to convince Mr Mittal or any other investor that his policies make good business sense. Several recent cases make this caveat necessary for Mr Munda?s efforts. More than anything else, it is Jharkhand?s rich reserves of iron ore that have prompted entrepreneurs to look at the state. But the government seems to be confused over how to marry a mining policy to the demands of the market. As a result, some of the government?s moves have generated more controversies than hope. Thus, when the Jindal group laid out a project to set up a steel plant in West Bengal with iron ore from Jharkhand, Mr Munda cried foul and even threatened not to allow the company to procure the ore from the state. The confusions had earlier led Mr Munda to cancel the licences to the Indian Iron and Steel Company to work at three iron-ore mines.

It is natural for any government to expect entrepreneurs to help develop the state?s economy. It is another matter, though, to make it a pre-condition for the use of the state?s natural resources. Mr Munda has harped on the need for investors to create employment opportunities in Jharkhand. He does not seem to accept that business ventures are not driven by populist motives. Also, he seems to underplay the government?s part in the development agenda. If potential investors are sceptical of Jharkhand?s prospects, it is largely because of the pathetic industrial infrastructure in the state. The investors want the government to build better roads, add to the state?s power generation and to improve on the state?s human development record. Above all, they want Ranchi to deal more effectively with the Maoist rebels. The fact that some of the state?s mining areas are located in the heart of rebel strongholds worries potential investors. On both mining policy and ways to deal with the rebels, Mr Munda can take a leaf out of the book of Orissa?s chief minister, Mr Naveen Patnaik. Orissa?s example shows how not to sacrifice economic policy to populist politics.