Changing phase

Published : Feb 09, 2007 00:00 IST

West Bengal charts its unique path to progress and prosperity, despite impediments.

IN 2001, when Buddhadeb Bhattacharjee was chosen to succeed the veteran Marxist Jyoti Basu as the Chief Minister of West Bengal the change of guard itself was perceived as a change of government. And when the Communist Party of India (Marxist)-led Left Front won the Assembly elections by an overwhelming majority for an unprecedented sixth consecutive time, defying the anti-incumbency factor, "do it now" became the new buzzword and the air was full of hope and promise.

Suddenly, West Bengal became the happening place; it was no longer a "graveyard for industries" or the last choice of an investor. Cynics just sat back and watched the process of transformation.

The State registered a consistent growth in real State Domestic Product (SDP) at over 7 per cent in the last few years. Despite being one of the most populous States in India, with the highest population density, it is ranked high in terms of growth in per capita income. In 2004-05, it achieved a growth in per capita income of 5.72 per cent, as against the national rate of 5.2 per cent recorded in the same period. A look at the industrial approvals and investments over the last 15 years will give a fair idea x about the rising popularity of the State among entrepreneurs.

The number of approvals of the Industry Entrepreneur Memorandum (EIM) indicates a rise from 99 in 1991 to 410 in 2005. The number of projects implemented has increased from 26 in 1991 to 227 in 2005. Foreign direct investment (FDI) in fiscal 2005-06, according to the Annual Report of the State government, was worth $119 million. The investors included those from the United States, the United Kingdom, Germany, Japan, Switzerland, Singapore, Malaysia and Hong Kong. Significant achievements have been made in the traditional sectors of iron and steel and petrochemicals and in the sunrise sectors of Information Technology (IT) and IT-enabled services.

The growth of the iron and steel industry in the State can be attributed to certain inherent advantages it enjoys, that is, proximity to raw materials, skilled manpower, port facilities, sufficient availability of power and a huge market for steel products. From 1991 to 2004, as many as 243 new iron and steel units were set up in the State. In the past four years, 108 projects were implemented. Some of the major players in this sector are the Durgapur Steel Plant and the Alloy Steel Plant of the public sector giant Steel Authority of India Ltd (SAIL); Electro Steel Casting, the largest producer of spun-iron pipes in the subcontinent; Gontermann Peipers, the second largest producer of iron- and steel-based rolls in the country; Bhushan Ltd, and Vesuvius India Ltd. The State government has devised a number of policies to encourage the growth of this sector, with a focus to achieve global competitiveness not only in terms of cost, quality and product mix, but also in efficiency and productivity.


In Haldia, the port city which caters to national and international giants such as the Indian Oil Corporation, Haldia Petrochemicals Ltd, Mitsubishi Chemical Corporation, Hindustan Fertilizer Corporation Ltd, Tata Chemicals and Exide Industries, a mega chemical industrial estate, spread over 10,000 acres (1 acre = 0.4 hectare) has been proposed. The Salim Group of Indonesia is slated to start a multi-product Special Economic Zone (SEZ), spread over 12,500 acres, in near Haldia. The other industrial hubs of the State include the Kolkata Metropolitan Development Area, the mineral-rich Asansol-Durgapur region and Kharagpur, which is home to a large number of engineering industries.

Seeking to tap the enormous potential for growth in the biotechnology sector, the West Bengal Industrial Development Corporation (WBIDC) is planning to set up a Biotechnology Park in Kalaikunda near Kharagpur in collaboration with the Indian Institute of Technology -Kharagpur. The State has traditionally had a climate conducive for the growth of engineering industries. Apart from Hindustan Motors, which entered into a collaboration agreement with Mitsubishi of Japan recently, Tata Motors is expected to start its small car-manufacturing unit at Singur in Hooghly district. The Tata project is expected to give a shot in the arm to the State's industrialisation drive, by facilitating the development of first-tier ancillary units that will supply components necessary for x car production. The Tatas will be setting up an equipment-manufacturing unit in Kharagpur.

Other companies such as Ashok Leyland have also evinced interest in setting up manufacturing units in the State. Another important project is that of the Salim Group's motorcycle plant at Uluberia in Howrah district. The Calcutta Leather Complex, spread over 1,100 acres at Bantola, became operational in July 2005, with its infrastructure including a common effluent treatment plant and a common chrome recovery plant. More than 160 tanneries have either completed or are close to completing construction work. As of mid-2006, 75 tanneries were operational, of which 32 were new ones. It is important to note that West Bengal is one of the leading States in the export of finished leather goods, accounting for almost 25 per cent of the country's leather exports.

The State government is also actively promoting micro and small industries in handicraft, handlooms, textiles, sericulture, khadi and village industries. Over 314,000 registered small enterprises operate in the State, employing more than two million people. The State government has adopted a multi-pronged strategy that offers a mix of institutional, marketing and infrastructure support to the sector.

Apart from rail, road and air connectivity to the rest of the country and prime locations of the world, West Bengal has two modern ports located in Kolkata and Haldia. Together they handled 52.03 million tonnes of cargo in 2005-06, the second highest in the country. The ports are being modernised. A new 3,000-acre port-cum-SEZ, in collaboration with Peninsular & Oriental Ports Ltd, is being planned at Kulpi.


As far as social infrastructure is concerned, the State with its public and civic amenities, and its rich heritage of art, education and culture, offers several educational and social opportunities. West Bengal's educational network consists of more than 66,925 primary schools, 3,159 secondary schools and 9,659 high schools and higher secondary schools. The number of Sishu Siksha Kendras, as on November 2005, stands at 16,117. Apart from important institutions such as Calcutta University, Jadavpur University, the Presidency and St. Xaviers colleges, IIT-Kharagpur, The Indian Institute of Management, Kolkata, and the Indian Statistical Institute, Kolkata, the State has eminent research institutes such as the Saha Institute, the Bose Institute, the Indian Association for Cultivation of Science and the Indian Institute of Chemical Biology.

Census 2001 estimated West Bengal's literacy rate at over 69 per cent as against the national average of 65 per cent.

The State's health care industry is competitive in terms of cost and quality, and is rapidly emerging as a destination for foreign medical tourists. West Bengal's network of health care facilities comprises 433 government and non-government hospitals, and 12,057 health units. There are nine medical colleges in the State and a Health City, which will have medical colleges, nursing institutions, technical training centres and hospital management schools, is being constructed near Kolkata. The State has performed x well in the area of improving life expectancy at birth. According to West Bengal Economic Review, 2005-06, life expectancy at birth stood at 66.08 per cent for males and 69.34 per cent for females, as against the national figures of 64.11 per cent and 65.43 per cent during 2005-06.


With the steady economic growth in terms of net SDP and per capita income, which has resulted in the creation of higher disposable incomes for a large number of people, it comes as little surprise that West Bengal is the third largest State in terms of savings with commercial banks x accounting for around Rs.854.8 billion. With 60 per cent of the population under 30 years of age, the trend is towards rapid urbanisation. As per Census 2001, the urban population of West Bengal is around 28 per cent, as against the national average of 27 per cent.All these factors, along with the rise in income level and the unprecedented growth in the service sector, which alone accounts for 57.15 per cent of the SDP, have naturally created greater expectations among people for quality goods and services. Apart from Kolkata, which has a consumer profile of around 10 million, urban markets such as Siliguri, Durgapur, Asansol and Maldah have been showing an upward trend.

The growth in the retail sector has encouraged the mushrooming of swanky shopping complexes and malls, particularly in Kolkata. Retail giants such as Pantaloons Westside, Emami, Shoppers' Stop, Forum and Big Bazaar have set up shop in the State. This has not gone unnoticed by global players such as the French Carrefour, the German Metro AG, and Wal-Mart and McDonald's of the U.S., who are waiting to grab a piece of the retail pie.

There is also an upsurge in real estate business. New townships are being developed to meet the increasing demand in the urban housing sector. The State government has formed eight joint venture companies to expedite housing projects. Apart from New Town, a project spread over 3,075 acres and developed by the West Bengal Housing Infrastructure Development Corporation, the Salim Group is setting up the Calcutta West International City, considered to be one of the largest foreign direct investments in township projects in the country.

The shift in the lifestyle of the urban population is evident in the array of entertainments on offer before them. The city abounds in coffee shops, multiplexes, health clubs, fitness centres and multigyms. Kolkata has a vibrant nightlife in discos, hookah bars and clubs. Large flyovers have come up to ease the pressure of vehicular traffic, which is growing at approximately 11 per cent a year. Kolkata is no longer a city of traffic snarls.


Some major changes are taking place in the rural markets too. The huge potential of this sector has started attracting investors, and the State government is examining proposals from corporates to take up procurement and marketing of produce in a big way.

This will throw open business opportunities in this emerging sector and result in an increase in the purchasing power and consumption profile of rural areas. Agriculture in West Bengal is characterised by two unique features x land reforms and devolution of effective executive and financial power to the elected panchayat bodies. This has revolutionised productivity and growth, leading to equitable distribution of rural wealth. The six agro-climatic zones of West Bengal offer extensive and varied environs for the development of temperate, subtropical and tropical produce, both agricultural and horticultural. The State has achieved significant growth in agriculture in the past decade. It is the largest producer of rice and the second largest producer of potato in the country. It also produces around 0.25 million tonnes of fruits and over 10 million tonnes of vegetables annually.

The consulting firm McKinsey and Company has asserted in its Vision Document for West Bengal, that the State should aspire to be the food bowl of India by 2010 owing to the self-sufficiency it has achieved in critical food crops and the leadership it has assumed in the production of a wide range of agricultural produce. The State accounts for 10 per cent of the country's edible oil production; it is the largest producer of fish and produces substantial quantities of spices, coconut, cashew nut, arecanut, betel vine and oilseeds.

Agro and food processing industries form an important part of the State's economy. A study conducted by the Government of India estimated that the investment potential in the food processing industry in the State is Rs.154.52 billion over the next 10 years. The State government is devising policies and plans to increase production of vegetables, fruits, rice, poultry, dairy and floriculture.

Some of the key investors in the food processing industry are AsconAgro PE & B Pvt. Ltd, a Pailan Group company, which has entered into a joint venture with AFT/PB Counsiel of France to set up unit in Dhaniakhali, Hooghly, to produce potato flakes; Dabur Ltd, which has set up its unit in north Bengal; Frito-Lay, a division of PepsiCo, which has set up a potato processing unit in Howrah district; and Arambagh Hatcheries, which was set up in 1975 and has grown by over 30 per cent annually. Unilever and Nestle have also expressed interest in setting up food processing units in the State.

West Bengal is also a unique State in that it has practically all landscapes that are required to make it a tourist hub - the Himalayas, the beaches, forests, the Sunderbans, tea gardens, historical sites and places of worship. The State government is sparing no effort to tap this potential. West Bengal is a safe place to be in since the law and order situation is well under control. The State has a long tradition of tolerance, which has resulted in communal harmony and a near-total absence of caste prejudices.

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