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World Bank to study FDI climate

Calcutta, Sept. 25: Hungry for foreign funds in industry, the CPM-led government is set to bring in the World Bank to conduct a study on the investment climate in Bengal.

The 'action-oriented study', to be conducted by the bank in association with the Confederation of Indian Industry (CII) or the Federation of Indian Chambers of Commerce and Industry (Ficci), will recommend short-, medium- and long-term reforms that need to be undertaken 'immediately' to help the govern- ment improve the climate for overseas investors.

'There has been no major FDI (foreign direct investment) in industry in Bengal since the Mitsubishi chemical plant at Haldia. This will be a state-specific study where constraints for growth in particular sectors/firms will be pinpointed,' a senior official of the commerce and industries dep-artment said today.

The study will scrutinise three main sectors:

• Industry/manufacturing, with emphasis on how to revive historically important sectors like engineering and suggest how new sectors like automobile may be developed'

• Agricultural processing: value addition in the fisheries sector

• Services, with an eye on prospects in banking and insurance

'There is tremendous scope for FDI in manufacturing, petrochemicals, leather, food-processing, engineering and automobiles. We want to know how to bring foreign funding into infrastructure and industry. Once we've finalised the terms of reference, we'll write to the Centre to approach the World Bank. We are already aware of the need to have public-private partnerships in infrastructure, port and air connectivity, and setting up special economic zones,' said commerce and industries secretary Sabyasachi Sen.

In addition, the study will try to find out:

• Whether special economic zones can provide a solution to problems encountered by investors;

• How to promote more public-private-partnerships;

• What more needs to be done to improve roads, ports, power supply, communication and airports.

The government would like the surveyors to focus on fostering entrepreneurship.

Eager to put behind the findings of CII-World Bank's All India Investment Climate Assessment last year, the government will arrange the surveyors' interface with a larger number and varied range of firms in the study. Bengal ranked 11 among 12 states in investor friendliness.

The researchers will also meet officials from finance, commerce and industries, cottage and small-scale industries, food processing, IT, power, labour, urban development, PWD and land and land reforms departments.

FDI proposals in Bengal between April and December 2004 amounted to Rs 59.08 crore and the state is again likely to fall short of the Rs 303.45 crore it had raised the previous year.

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