The Telegraph
Since 1st March, 1999
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Bengal braces for tremors

Calcutta, May 17: The tremors that shook the Bombay Stock Exchange are bound to reach Buddhadeb Bhattacharjee’s Bengal, which is trying hard to reposition itself as an investment destination.

“There is hardly any doubt that the stock market crash was triggered by statements made by a section of Left leaders,” said a city-based industrialist.

“It’s true that the market will revive in its natural course, but the irresponsible behaviour of the Bardhans and Yechurys will have an impact on the state as Left means Bengal.”

While CPM politburo member Sitaram Yechury said the disinvestment ministry should be wound up, CPI general secretary A.B. Bardhan said the new government would have to drop the divestment policy.

The businessman, who did not want to be named, said the statements by Yechury and Bardhan were “unnecessary” and created panic in the market. The “irresponsible” remarks would go against the interest of business in Bengal, which has contributed over 60 per cent of the seats to the Left’s tally of 63, he added.

The sensex, the BSE benchmark index which reflects market movement, ended the day at 4505.16, a net loss of 565 points, the second largest fall after the 1992 stock scam when it collapsed by 570 points.

Industry observers were unanimous that the Left leaders should have maintained some restraint and there was no need for “jumping the gun”. The criticism of the Left ranged from “myopic” to “mindless”. The only saving grace was the silence maintained by the Left leadership in Bengal.

Describing the fall in the stock market as “strange” and “temporary”, Kiran Karnik, the president of the National Association for Software and Services Companies, said: “Though the statements were not extraordinary, they could have been better worded. But there is no need to press the alarm bell and I think the market will recover.”

While expectation of a recovery features on the wish list of all stakeholders, from regulators to common investors, the prudence of the Left leaders has been questioned once again.

“The government is yet to take shape and a lot of issues need to be thrashed out. At this point, individual views are uncalled for and the Left leaders should let the government swim first before tying its hands,” said Nazeeb Arif, secretary-general of the Indian Chamber of Commerce.

Karnik, who has always praised Bhattacharjee’s government for its investor-friendly initiatives, added: “For informed investors, the statements will not have any impact as they are not made by people who are running the government in Bengal.”

He was possibly hinting that the investor community’s concern was with what the Bengal leadership — aware of the importance of perception and the compulsions of running a government — was saying on the issue, and not the party’s hardliners in Delhi.

Economist Anup Sinha ruled out the possibility of any link between the slide in the market and the statements of Left leaders, but said the CPM had missed one more opportunity to make its presence felt nationally.

“The CPM should have bid for the disinvestment portfolio and set its agenda for the next five to 10 years. They could have given a policy direction, but it seems they have chosen to remain a regional party,” said the professor at the Indian Institute of Management Calcutta.

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