Remarkable growth

Published : Feb 10, 2006 00:00 IST

In the past few years, West Bengal has made great strides in industrial development in terms of investment.

"West Bengal now has all that it takes to emerge as a frontrunner - not only among Indian States but indeed the world over - as it is led by a government which possesses a sense of urgency and direction."

- Jairam Ramesh

THE Congress leader's comment is corroborated by data available in the Planning Commission of India and the Centre for Monitoring Indian Economy (CMIE). They show that West Bengal has gradually emerged as one of the top five States in the country in respect of industrial investment, and one of the top three in terms of rate of growth of per capita income. In fact, with a per capita income growth rate of 5.4 per cent, West Bengal is second only to Karnataka (6.2 per cent) and well above the national average of 4.2 per cent. It is also a major producer of agricultural goods.

Over the past 10 years, West Bengal made rapid economic growth. Its industrial growth rate is actually 1.1 per cent higher than the national average and, in the past four years, new projects worth more than $2 billion have been commissioned. In the calendar year 2004, 196 industrial projects were implemented, involving a total investment of Rs.2,243.80 crores. The sectors which registered encouraging growth include iron and steel, information technology, petrochemicals, agri-business and food processing.

Among the important projects implemented in 2004 are G.C. Steel sheet products of Jindal (India) Ltd. at Howrah (Rs.100 crores), C.R. Steel sheet products of Bhushan Industries Ltd. at Hooghly (Rs.97 crores), software products of Wipro Technologies Ltd. at North 24 Paraganas (Rs.90 crores), food products of Frito-Lay India at Howrah (Rs.80 crores), aluminium and steel products of Manaksia Ltd. at East Midnapore (Rs.74 crores), food products of Acalmar Oils and Fats Ltd. at East Midnapore (Rs.54 crores), iron and steel products of Tata Metallics Ltd. at West Midnapore (Rs.49 crores), steel products of Ankit Metal and Power Pvt Ltd. at Bardhaman (Rs.40 crores) and food products of Rasoi Ltd. at South 24 Paraganas (Rs.40 crores).

The state domestic product (SDP) grew at a rate of 7.49 per cent at constant 1993-94 prices in 2003-2004, as against 7.14 per cent the previous year. The Communist Party of India (Marxist)-led Left Front government has identified certain thrust areas, which include petrochemicals and downstream industries, electronics and information technology, iron and steel, metallurgical and engineering, textiles, leather and leather products, food processing, gems and jewellery, tourism, and basic drug chemicals and pharmaceuticals. Importance is being given to the development of medicinal plants, rubber, palm oil and tea, mines and minerals, and industrial and social infrastructure.

In the information technology sector, identified by the State government as a priority growth sector, West Bengal has registered a Compounded Annual Growth Rate (CAGR) of 88 per cent between 1996-97 and 2002-03. The government's short-term focus is on IT-enabled services (ITeS), which is expected to record tremendous growth in the coming years. An August 2002 study by National Association of Software and Service Companies (NASSCOM) on the competitiveness of nine Indian cities in ITeS ranked Kolkata fifth. A Hewitt Associates study too spoke about the advantage of setting up IT and IteS industries in Kolkata. The most recent major investment in the IT sector came in December 2005, when Mahindra BT (MBT), one of India's largest software exporters, set up shop in Kolkata. The company plans to take advantage of the State's talent pool and would employ 3,000 technologists from West Bengal by 2008. Vineet Nayyar, chief executive officer (CEO) and managing director of MBT, said that the operations in Kolkata would be the largest outside Maharashtra and the planned investment for the city would be Rs.150 crores to Rs.200 crores over the next three years.

The State government has also put in place sector-specific infrastructure. Manikanchan, a gem and jewellery park of international standard in the eastern Kolkata suburb of Salt Lake City, is the country's first sector-specific Greenfield Special Economic Zone (SEZ). Asia's largest leather complex has come up in the southeastern part of Kolkata, where the bulk of local tanneries that process the best `wet blue' goatskin have shifted base. A 5,000-acre mega chemical hub is coming up at the Petrochemical City in Haldia. The Indonesian Salim Group is setting up a two-wheeler plant and a mega housing project at Howrah. Moreover, the West Bengal Industrial Development Corporation (WBIDC), the premier State government agency for promotion and development of industries, has developed a number of sector-specific infrastructure projects such as Shilpangan, the Light Engineering Park in Salt Lake; Sudha Ras, the food processing Park at Sankrail; and Rubber Park, in collaboration with the All India Rubber Industries Association (Eastern Region) at Domjur in Howrah.

Another important project taken up by the government is the permanent Trade Fair Complex in Kolkata on the Eastern Metropolitan Bypass. The project is being set up in partnership with the Kolkata Municipal Corporation (KMC). Prominent trade and industry organisations such as the Confederation of Indian Industry (CII) have been approached to participate in the project in different phases. A special purpose vehicle, West Bengal Trade Promotion Organisation, has been established to implement the project.

One major advantage for West Bengal is its excellent road connectivity. Its road density of 103.69 km per 100 sq km is considerably higher than the national average (74.7 km). The total length of roads in the State is more than 92,023 km and the total length of highways passing through it is 2,325 km. There are two modern ports in Kolkata and Haldia, which handle a combined cargo of over 46 million tonnes annually - the second highest in the country. Both ports are being modernised and upgraded to deal with the growth in cargo quantity. Other than these, a new 3,000-acre port-cum-special economic zone is coming up at Kulpi. The State has two airports and a rail network of 3,681 km, of which 1,700 km is electrified. Around 240 km more of railway lines are being constructed, and a dedicated freight corridor between Delhi and Kolkata is being considered. In fact, West Bengal ranks fourth in the country in the route density of railways.

The State has a distinct geographical advantage for the growth of exports. It is contiguous to three of India's South Asian Association for Regional Cooperation (SAARC) neighbours - Bangladesh, Bhutan and Nepal. Myanmar is not far away. Moreover, with the expected re-opening of the Nathu La, land trade with China is expected to increase. In this context, the State government has taken a series of measures, including constructing critical infrastructure. It announced its export policy in July 2003 in an effort to increase West Bengal's share in Indian exports from 6 per cent to 9 per cent. The State has six Agri-Export Zones to process pineapple, mango, lichee, potato and other vegetables and tea.

West Bengal's efforts are being noticed not just in the country, but abroad as well. The Guardian noted on January 5: "With land subsidy, hi-tech labour and a willing administration, West Bengal is a draw to foreign investors." The paper quoted Chief Minister Buddhadeb Bhattachajee as saying that India must learn the lessons of history and "reform, perform or perish". Praising Bhattacharjee's pragmatist policies, the paper said: "Despite a head full of ideas for a Bengal tiger economy, at heart he [Bhattacharjee] remains a proud communist and Marxist. With only a slight smile he said, `Do not think that capitalism will write the last chapter of human civilisation'."

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