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Finance remains a key area of concern in Bengal

Finance remains a key area of concern in Bengal
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First Published: Sun, Aug 28 2011. 10 24 PM IST
Updated: Sun, Aug 28 2011. 10 24 PM IST
Kolkata: History came full circle on 20 May when within hours of being sworn in as West Bengal’s chief minister, Mamata Banerjee announced that her government would return land to farmers who protested the land acquisition for Tata Motors Ltd’s small car factory in Singur.
Emerging from the swearing in ceremony five years ago, erstwhile chief minister Buddhadeb Bhattacharjee walked into the arms of Tata group chairman Ratan Tata, who announced from Writers Building—the state secretariat—that Tata Motors had selected West Bengal to set up its Nano car factory.
If Bhattacharjee’s 18 May 2006 announcement determined the course of politics in West Bengal for the next five years, Banerjee with her first announcement as chief minister established in the mind of government officers and her supporters what she was up to; she wasn’t going back on promises she made as the leader of the main opposition party, the Trinamool Congress.
In writing the epitaph for Tata Motors’ small-car project in the state, she matched or bettered Bhattacharjee’s pace in acquiring land for the now abandoned factory. Armed with an Act, the state government seized within weeks the 997-acre plot in Singur to give parts of it back to protesting farmers.
As the state government fights a legal battle with Tata Motors to defend the disputed Act, some officers in the administration wonder if haste is going to result in the undoing of Banerjee’s initiatives much in the same way as it marred those of her predecessor.
As Banerjee completed 100 days in office on Saturday, Abhirup Sarkar, professor of economics at Kolkata’s Indian Statistical Institute, says it is still too early to judge, but some of the key challenges before her government remain unaddressed. “Finance remains an area of concern,” says Sarkar. “She must realize doles from the Centre wouldn’t be enough and that there is no alternative to generating own resources through taxes.”
While reaching out for the low hanging fruits such as economic backwardness and lack of civic infrastructure in certain parts of the state, Banerjee has made it clear that she wouldn’t let her government raise taxes in these times of implacable inflation. She even refuses to raise power tariff in line with the increase in coal prices, despite realizing what it means for the state-owned power utilities.
“I don’t agree with the view that she doesn’t understand the consequences (of not raising taxes and power tariff),” said the head of a key department in her government. “She has a definite game plan, though I don’t think anybody in the administration has yet managed to figure out what it is.” This officer did not want to be named.
The erstwhile Left Front government’s 34-year rule ended with a policy paralysis. For the last two years of its term till May, the government didn’t take any major policy decision, though according to former commerce and industries minister Nirupam Sen, the government had learnt to “do things quietly”.
The paralysis continues. Officials say files aren’t moving.
For instance, Banerjee got Debabrata Bandyopadhyay, a former bureaucrat and now a member of the Rajya Sabha, to draft a land use policy. He said in his recommendations that the state government shouldn’t acquire land for setting up factories, reasoning that firms operating in a market economy must deal with market forces directly.
It’s been months since Bandyopadhyay’s recommendations were made public, but they have not been adopted as a policy. Businessmen, though, have given up hopes of setting up large factories in the state, evident from the sharp decline in proposals for new projects.
To cite another instance, it isn’t clear what Banerjee has in mind for housing. On 24 June, she halted land acquisition in Rajarhat, a new township neighbouring Kolkata, and, around the same time, the state’s commerce and industries minister Partha Chatterjee told real estate developers they shouldn’t build homes on abandoned factory sites.
“The previous government had conceived Rajarhat as a solution for Kolkata’s fast expanding population,” said a Kolkata developer. “It isn’t clear how the chief minister is going to solve that problem without expanding townships and without letting us build new homes.” He declined to be named.
That apart, urban land ceiling—a restrictive law under which the state caps landholding by private entities—is now “not negotiable”, according to a key bureaucrat, who spoke on condition of anonymity.
Though no formal announcement to that effect has yet been made, the government has begun losing out on central development funds that are linked to the withdrawal of the urban land ceiling Act. And the terrible state of roads in Kolkata is being blamed on the poor finances of the Kolkata Municipal Corporation, which receives such funds from Delhi.
Officers who work closely with Banerjee say some of her decisions were fast, but, at the same time, many files have been stashed away in filing cabinets for weeks. “To be fair to her, some of the problems she has to decide on do not have please-all solutions, and that’s when files start piling up,” one of the officers cited above, said.
As promised in her election manifesto, Banerjee engaged the protesting Gorkhas in discussion and managed to work out a package for greater administrative autonomy of the natives of the hills.
The broad package was well received by both the Centre and the Gorkhas, and Banerjee counts the hill accord as one of her key successes in the past 100 days, but the jurisdiction of the proposed Gorkha Territorial Authority (GTA) has not yet been determined.
“This is a major red herring,” says an officer who is part of a consultative panel determining the authority of the GTA, speaking on condition that he would not be named. “It is impossible to put under the GTA all the areas that the Gorkhas want because it would upset a lot of non-Gorkha natives, and no easy solution is immediately in sight.”
Meanwhile, Maoist insurgents in West Midnapore are slowly regrouping, according to state intelligence officers, though the unrest has abated. Banerjee’s development package for the West Midnapore district to build civic and social infrastructure was received well by the native tribals, but the rebels spurned her compensation offer for laying down arms.
There was little except despair for the industry in the first 100 days of Banerjee’s rule, but her call to all political parties to shun strikes brought out sharp differences between her and her predecessor’s political strengths. Bhattacharjee used to say he didn’t support the politics of strikes but was unable to stop Left-backed trade unions from calling strikes.
“Banerjee doesn’t have the baggage of stubborn trade unions on her shoulders,” said a Kolkata-based industrialist, who did not want to be named. “We backed her and continue to do so because she pretty much decides everything for her party—this means we don’t have to deal with five leaders and five trade unions as was the case before.”
romita.d@livemint.com
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First Published: Sun, Aug 28 2011. 10 24 PM IST