Monday, 10 March 2014


West Bengal saw 97% decline in industries since 2010
The state saw projects worth Rs 312 crore being implemented, which was a fall of nearly 85% over the previous year

After the recent Cabinet reshuffle in West Bengal, it is yet to be seen if the newly appointed commerce and industry minister, Amit Mitra, has a magic wand to bring investors in West Bengal, but surely his predecessor’s tenure was riddled with industrial degradation, carefully camouflaged in stellar growth numbers. 

In its presentation to the Planning Commission, West Bengal has said that since May 2011, the state received investment proposals of Rs 1.12 lakh crore, with a potential to create 314,000 jobs. 

However, the actual implementation of the projects is nowhere near the proposed investments. The year 2012 was particularly rugged in the industrial front for West Bengal. The state saw projects worth Rs 312 crore being implemented, which was a fall of nearly 85% over the previous year, and 97% over 2010-the last year of Left Front rule in the state, according to data from the West Bengal Economic Review 2012-13. 

In 2012-13, West Bengal saw industrial sector growth of 5.48% (at constant 2004-05 prices), which was higher than that in 2011-12, when the state's industrial sector grew at 3.82%. However, the industrial growth in 2011-12, the first year of TMC-led government in West Bengal, was much lower than that in 2010-11, when the industrial sector grew by 5.83%. 

At the core of the industrial deprivation in West Bengal lies the unavailability of land in the state. In its draft industrial policy stated that the government is against any kind of forcible acquisition of land, that washing off hands from acquiring any land for industries in the state. 

“Land is a big issue in West Bengal. I think the government is learning its lessons, and eventually it will choose a middle path to promote industries, while not deviating from its old stance. I am hopeful that Mr Mitra will be able to initiate direct discussions with top industrialists and sort out the issues,” said Dipankar Dasgupta, former professor of Economics, Indian Statistical Institute. 

Again, The All India Trinamool Congress booklet, on the occasion of completion of two years of governance, says that the gross state domestic product (GSDP) growth rate in 2012-13 was at 7.60% compared to the national average of 4.96%. But a closer look reveal that West Bengal’s GSDP growth is much less than the peak growth in the last five years, which came in 2010-11, when GSDP grew at 9.22% (at 2004-05 prices), according to data available with the Planning Commission. 

The stagnation in the industrial front in the state can be assessed by the state of real estate sector in West Bengal. The state did not receive any investment, either foreign or domestic, in the real estate sector in the financial year 2012-13, according to a recent report by industry body Assocham. In 2011-12, the State attracted new investment commitments in the real estate sector worth over Rs 1,200 crore. The state's adherence to the Urban Land (Ceiling and Regulation) Act (ULCA), 1976, has is one of the biggest roadblocks in acquiring large tracts of land in the real estate sector. West Bengal is one of the few states in the country to have a legislation like the ULCA. However, much to the disappointment of the developers, the state has declined to repeal the act.

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