Bengal looks to tap funds for industry

Bengal looks to tap funds for industry
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First Published: Tue, Jun 30 2009. 11 43 PM IST
Updated: Tue, Jun 30 2009. 11 43 PM IST
Kolkata: West Bengal’s state-owned industrial development agency is looking to borrow Rs500 crore from banks to partly fund the acquisition of 15,000 acres required to restart 15 stalled projects, in a move that comes barely a month after the ruling Left Front government’s poor performance in parliamentary elections in the state—a performance attributed by several people within the party to the state government’s industrial drive and efforts to acquire land for industrial projects.
The West Bengal Industrial Development Corp. Ltd, or WBIDC, is in the process of finalizing deals with banks to borrow Rs500 crore, said WBIDC’s managing director Subrata Gupta. Gupta declined to name the banks.
The loan drive marks the first major step by the West Bengal government to revive industrial projects in the state since the general election held in April and May. The Communist Party of India (Marxist), or CPM-led Left Front, which has ruled West Bengal for the past 32 years, could win only 15 of the 42 Lok Sabha seats in the state; in 2004, it had won 35.
Several Left Front leaders, including some members of the CPM politburo—the party’s highest decision-making body—had blamed the party’s poor performance on the state government’s industrialization drive. The state’s commerce and industry minister Nirupam Sen, in an exclusive interview a month ago, had said, “It is undeniable that the debate over land acquisition has influenced voters, particularly peasants. Because they aren’t convinced that industrialization could make a significant difference to their lives, they are concerned that they might get uprooted if they lose their land.”
Over the past few years, West Bengal has seen its share of protests against forcible land acquisition by the state for industrial projects. Several projects, such as Tata Motors Ltd’s small-car factory in Singur, DLF Ltd’s proposed 4,840-acre township in Hooghly, and the chemical hub that Indonesia’s Salim Group had planned to build in Nandigram, had to be abandoned in the face of these protests.
An alliance of the Trinamool Congress, or TMC, a party that was at the forefront of these protests, and the Congress, won 25 Lok Sabha seats in the general election.
Among the projects that may benefit from the land acquisition drive are those of Bengal Aerotropolis Projects Ltd, which plans to build a township integrated with an airport at Andal in the state’s Bardhaman district; several iron and steel factories to be built by firms such as Shyam Steel Industries Ltd, Adhunik Group of Industries and Jai Balaji Industries Ltd; and an aluminium smelter that Vedanta Aluminium Ltd plans to build.
Gupta of WBIDC said the state government’s immediate aim is to acquire 10,000 acres in two districts, Bardhaman and Purulia.
The state cabinet had cleared proposals to secure land for around 15 projects some time back, but the Election Commission didn’t allow WBIDC to start the process of land acquisition ahead of the general election fearing violent protests.
Analysts say WBIDC’s decision to build a war chest for land acquisition is an indication that the state government will continue to play a key role in securing land for industrial projects.
The government itself has said in the past that companies are better at acquiring land than the government. The state’s finance minister Asim Dasgupta, too, said as much while speaking at Mint’s Clarity Through Debate conclave in Kolkata on 19 June.
The Union government, too, has repeatedly said state governments should desist from acquiring land for industrial projects.
Almost all projects for which the West Bengal government was to acquire land have either been abandoned or delayed because of resistance from peasants and the TMC.
Earlier this year, Dasgupta provided Rs150 crore in budgetary support to create a land bank for industrial projects, but according to Gupta, the fund hasn’t yet been transferred to WBIDC, which acts as a nodal agency for securing land for industrial projects in the state.
“We have already borrowed Rs50 crore to start land acquisition for the Bengal Aerotropolis project. We are borrowing more because the fund sanctioned under the state budget (Rs150 crore) hasn’t come to us yet,” Gupta said.
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First Published: Tue, Jun 30 2009. 11 43 PM IST