August 25, 2013

West Bengal has to go miles before industrialisation in reality can begin

By Sutanuka Ghosal & Atmadip Ray, ET Bureau Aug 11, 2013, 04.00AM IST

It had taken no less than half-a-dozen industry interfaces before the first glimmer of hope came in Mumbai on August 1. That hope, in the context of a severely battered Mamata Banerjee government, has a name: Mukesh Ambani. That is because the elder Ambani brother turned up at the World Trade Centre industry meet organised by the West Bengal government.

The younger Ambani sibling, Anil, did not turn up although Mamata had gone to Mumbai, reportedly armed with a project clearance certificate for the proposed Rs 600-crore cement plant of Anil Ambani in Purulia district's Raghunathpur.
Not many in Mumbai's super league turned up; but some 45-odd did, a few out of curiosity. "I went because I was curious to find out whether she is any different from what I see on television. Not that I plan an investment in Bengal soon," said one industrialist on condition of anonymity.
Despite some high-voltage post-event drumbeating in Trinamool Congress circles, the fact is that the jury is still out on what the claimed success of the August 1 meeting would translate to in reality. Would one meeting lead to thousands of crores of investments being pumped into an industry-starved Bengal?
Viewed differently, Mamata has reasons to cheer. Even if Bengal is incidental to Mukesh Ambani's countrywide 4G rollout, it will still shore up her rapidly eroding image should Bengal be part of the 4G networking as it certainly would.
Her publicity machinery would take care of the rest, and she would undoubtedly be touted as a chief minister who has been able to rope in the biggest corporate figure of all! If Anil Ambani comes in too, Mamata can justifiably claim success for having roped in India's largest business conglomerate.
However, let's be modest about it because the ground reality in Bengal shows that the state will have to go miles before industrialisation in reality can even begin to happen. Here is why.

In Mumbai, Mamata indicated she would be able to provide land in a limited way from the state's land bank. However, that bank actually shows a kitty of some 10,000 acres, which unfortunately is largely made up of small, non-contiguous parcels of land that can hardly be home to big projects.
Besides, Mamata has made it very clear that her government will not act as a facilitator in procuring land. The industrialists would have to negotiate on their own with farmers for that purpose. That is hardly going to be a turnon because few would have the time or patience to negotiate with smalltime farmers for land.
The government has initiated timebound steps to modernise infrastructure facilities and create new clusters and growth centres. Since infrastructure creation involves considerable investments, the state has decided on public-private participation.
However, the PPP model has not attracted any major investment so far. The government's reluctance about giving special economic zone status to any new project in the state is an additional turn-off.
A long list that includes Wipro, Infosys, JSW Steel, NTPC among others. It is not that all these projects are in the lurch because of Mamata. Still the fact is that industry-wise, new projects intended to come up and change Bengal's skyline aren't taking off for one reason or the other.
Then there are those that have remained in the ideas-stage only. A whopping 25 health projects announced in October 2011 have never come up. Darjeeling, instead of becoming Bengal's Switzerland, now threatens to go away to another state altogether if Gorkhaland becomes a success in future.
Kolkata is still not London and not one among the 56,000 sick units that Mamata had vouched to revive, have fared any better.
This is something that Mamata herself says. How can a state that has to pay a stupendous Rs 25,000 crore this year to service its burgeoning debt afford an investible surplus? And this debt-servicing burden will only increase every passing year as the government, facing a debt-trap like situation, is forced to borrow from the market at exorbitant rates.
There is one silver lining though. The state's finance department under Amit Mitra has managed to increase revenue by 30% in the last fiscal, exceeding the 25% growth target. But the growth in tax collection may not sustain in agrarian Bengal, if industry activity does not grow in the state.
This is a rare deemed positive feature of Bengal. The state has come up with better growth numbers in 2012-13. Its GDP grew 7.6% as against the national average of 4.96%; agriculture and allied sectors grew 2.56% compared with the countryi¦s 1.79% (based on advance estimates). The statei¦s industry sector grew 6.24% against the national average of 3.12%. But truth is that while these numbers are impressive, it is largely because the base is low.
This is a real positive. In her two-year stint, Mamata has used central funds very smartly in building rural infrastructure, which probably helped her party win the panchayat polls. Village roads are being built at a brisk pace using the Pradhan Mantri Gram Sadak Yojana. The government has taken up an aggressive rainwater harvesting project by digging 50,000 ponds across the states using labourers under the National Rural Employment Guarantee Act.
Mamata is at least making some noises correctly. She has, for instance, just announced a 100% tax waiver on aviation turbine fuel (ATF), which will reduce the cost of airline operators by at least 8%. She has also announced plans to come up with a fresh industrial policy by the month end to woo investors. One hopes that industry is impressed enough to accept her offer, but that is an unfolding story yet.

August 24, 2013

Criminal charges against West Bengal chief Mamata Banerjee

Director-general complains of being denied promotion and harassment after relationship turned sour
  • By Archisman Dinda, Correspondent
  • Published: 18:06 August 23, 2013
  • Gulf News

Kolkata: One of the most senior police officers in West Bengal, Dr Nazrul Islam, has lodged a criminal complaint against Chief Minister Mamata Banerjee and two senior most bureaucrats of the state, chief secretary Sanjay Mitra and the home secretary Basudeb Banerjee.

Islam, who is Additional Director-General (Provisioning), submitted a 65-page letter of complaint to the Hare Street police station in Kolkata on August 17 urging the police to accept it as his First-Investigation-Report (FIR), where he has charged Banerjee and other bureaucrats of causing “criminal intimidation, causing mental agony, denying promotion, disallowing leave and bugging communication lines and causing criminal intimidation to his family members.”

On August 19, in another letter, he sought from the police what action had been initiated against his complaint and which sections of the Indian Penal Code and The Code of Criminal Procedure had been evoked against those accused.
The letter has caused a furore within the police department as it is an unprecedented move for a police officer to file an FIR against the chief minister.

Police officials refused to comment. “I am not aware,” was the statement offered by top brass of the city police.

Even Islam refused to comment. “Since this is about me, I will not comment on the issue.” Sources inform that Islam had earlier written to Banerjee warning her of filing a criminal case if she did not respond to his letter by July 22.

Islam was considered an officer close to Banerjee. He had a conflict with the previous Buddhadeb Bhattacharjee government in 2010. Banerjee then as railways minister upheld his cause as an honest and upright police officer. She created a special post for him in the railways and, on her becoming the chief minister, Islam became officer-on-special-duty at the Chief Minister’s Office.

But things started to go sour after Islam wrote two books — Betterment of Muslims in Bengal, and What the Muslims in Bengal Should Do — accusing the chief minister of trying to appease the Muslim community with handouts without really doing anything meaningful for the community.

The state government had initiated departmental proceedings against Islam accusing him of trying to create communal tension in the state.

The case was referred to the Registrar of Publications, Government of West Bengal, which after examining the contents, gave clearance as they did not find any provocative material in the books.

The police now have to seek West Bengal Governor’s sanction to prosecute anyone on the basis of this complaint.

In case no action is taken, Islam can petition the Governor, and can also move the High Court seeking judicial intervention.

Criminal charges against West Bengal chief Mamata Banerjee |

August 20, 2013

Mamata Banerjee playing with fire on Gorkhaland issue: CPI(M)

PTI Aug 19, 2013, 02.51PM IST

NEW DELHI: CPI(M) on Monday said West Bengal chief minister Mamata Banerjee was "playing with fire" in the way she was tackling the Gorkhaland issue and claimed she was "incapable" of understanding ground realities in some troubled parts of the state.

"It seems she is incapable of understanding the ground realities and the difference between Jangalmahal and the hill areas (of North Bengal). An economic package and some infrastructure development can bring some visible changes in the former, but in Darjeeling, one has to take into account the ethnic factors entwined in the whole issue.

"It seems the chief minister is oblivious of it. She is playing with fire. We can only hope that it doesn't burn her and the rest of the state," CPI(M) Politburo member and Leader of Opposition in West Bengal Surjya Kanta Mishra told PTI.

He accused Banerjee of first "playing cosy" with Gorkha Janamukti Morcha (GJM) for "petty political gains", then going for a tri-partite accord in July 2011 and "now when GJM ups its demand after Telengana, she gets into a combative mode."

"This kind of flip-flop will never help. The chief minister should have never slammed the doors on dialogue. You can't abruptly stop talking," Mishra, who was here to attend CPI(M) Central Committee meeting, said.

He asserted that there was no other way for the state government than to hold a tripartite dialogue with the agitators, involving the Centre.

"Moreover, an all-party meeting on the issue, which we have been demanding for long, should be convened with all stakeholders urgently to discuss the prevailing situation," he said.

Mishra, whose party has been opposed to the creation of a separate state of Gorkhaland, said it was not a pragmatic idea to have a state where there were only three sub-divisions and not a single district.

"A separate state is never a viable option," he said while referring to the need for sustaining the economy in the hill region and the strategic importance of Darjeeling vis-a- vis international borders.

"But the Trinamool government as well as the Centre, where the TMC was a coalition partner then, should have understood this before including the word Gorkhaland (in Gorkhaland Territorial Administration or GTA) and acknowledging the demand for a separate state while passing an Act in the Assembly. We had opposed those provisions of GTA Act, but the government was adamant.

"And now, stopping all talks or negotiations with the agitators, the chief minister is only stoking fire. The Hillsare not smiling back to her," the CPI(M) leader said.

Regarding the recent panchayat polls in West Bengal, Misra said the Left's gains, mainly in the gram panchayat and panchayat samiti tiers, were "in those areas where Trinamool had won hands down in 2011 Assembly polls".

Mamata Banerjee playing with fire on Gorkhaland issue: CPI(M)

August 10, 2013

Singur's farmers discover the lie of the land

Unwilling land-losers to the Tata Nano project in Bengal remain the biggest victims of the politics that brought Banerjee to power

By Ishita Ayan Dutt  |  Kolkata  July 23, 2013
Business Standard, Columns

Singur has always been kind to Mamata Banerjee. First, it resurrected her political career. Then, just days before the panchayat elections this month, as angst over an unending wait for the return of land acquired for Tata Motors' small car project from farmers who did not wish to sell was growing, the Supreme Court suggested that the company return the land.

Banerjee and Singur share a history that dates back to 2006. On May 18, that year, a beaming Buddhadeb Bhattacharjee, who had just been sworn in for a second term as chief minister, announced - flanked by Ratan Tata and Tata Sons' brass at Writers' Buildings - that the project to make the world's cheapest car, the Nano, would be located in Bengal. "How do you like the beginning?" he asked reporters, a reference to his attempt to attract big business to Bengal. Little did he know that this signature project would mark the beginning of the end of the Left Front's 34-year dominance in the state.

It was Bhattacharjee's ambition to put Bengal back at the forefront of industrialisation, and he believed the Nano project was the first step towards realising it. Getting the project to locate itself on agricultural land about an hour's drive from Kolkata wasn't easy. Tata Motors' interest came with the rider that the state government should offer fiscal incentives equivalent to the value of those offered by Uttarakhand, whose backward state designation allowed it to deliver income tax and excise duty relief.

Naturally, the incentive package an eager state government devised for Tata Motors was extremely friendly. It offered the following:

(a) Industrial promotion assistance from the state industrial development corporation in the form of a loan at 0.1 per cent interest for amounts equal to the Value Added Tax and Central Sales Tax the Bengal government received on Nano sales in each of the previous years ended March 31. The loan, with interest, was to be repayable in annual instalments after the 30th anniversary of the plant starting sales.

(b) A 90-year lease for 645.67 acres at Singur at an annual rental of Rs 1 crore for the first five years. The rent would increase 25 per cent after every five years for 30 years; Rs 5 crore a year from the 31st year with an increase of 30 per cent every 10 years till the 60th year; Rs 20 crore a year from the 61st year to the 90th year.

(c) A loan of Rs 200 crore at 1 per cent interest repayable in five equal annual instalments from the 21st year.

(d) Electricity at Rs 3 per kwh. If the rates were raised more than Rs 0.25 per kwh in any block of five years, the government would provide relief through additional compensation to neutralise the increase.

It wasn't this package, which would have meant a significant forfeiture of state revenue, that exercised the politics of West Bengal as much as Banerjee's decision to make the discontent of 2,000-odd unwilling land-losers - who accounted for roughly 180 acres of land - the centre of her political campaign.

But from August 24, 2008, Banerjee and her party laid an indefinite siege to the area around the plant. She claimed unwilling land-losers accounted for 400 acres and not 181 acres as the state claimed. The 400 acres, she felt, could be retrieved from the vendors' park, which was adjacent to the mother plant, and the remaining 600-odd acres could be reserved for the project.

The demand was untenable to Tata Motors. To keep the cost of the Nano at Rs 1 lakh, it was imperative to maintain the integrated nature of the project. With Banerjee's energetic help, the protests reached such a pitch that Ratan Tata announced the headline-grabbing decision to relocate the project, which it did with even more fanfare to Sanand in Gujarat.

Despite this, Banerjee as chief minister never budged from her position. Hours after taking charge at Writers' Buildings, the state secretariat, she announced the Cabinet decision to return land to unwilling land-losers. After a flip-flop over an Ordinance, the Singur Land Rehabilitation and Development Bill was passed in the West Bengal Assembly on June 14, 2011, vesting the entire land allocated to Tata Motors and its vendors with the state government.

A week after the Bill was passed, Tata Motors moved court challenging it. The first round went to Banerjee. A Calcutta High Court single-judge order declared the Act valid. The Division Bench (moved by Tata Motors), however, set aside the single-judge order and struck down the Act, primarily because it was in conflict with the Land Acquisition Act of 1894. The state then filed an appeal in the Supreme Court.

It was while hearing an appeal challenging the quashing of the Act that the Supreme Court asked the Tata group to make its stand clear on the leasehold rights over Singur. But it is unlikely that the Tata group will give up the fight. It's not just about the land; for the group, it's as important to clear its name from the Banerjee government's allegation that it had "abandoned" the project, which is the basis for the Singur Act. In reality, the plant, at the time of pullout, was 80 per cent ready.

Tata Motors had invested over Rs 1,800 crore in developing and levelling the land, and constructed the plant in 13 months. Trial production had even started. " stone was left unturned to ensure that commencement of production happens in time to meet the targeted launch date of November, 2008," the company's petition to the court said. Thirteen vendors had also finished constructing their plants, and 17 others were at various stages of construction.

Hypothetically, even if the Supreme Court verdict goes against Tata Motors, returning the land would be well-nigh impossible. The land belonging to the unwilling farmers doesn't add up to 400 acres, as Banerjee has repeatedly claimed, and more importantly, it's scattered over the 997 acres. Then again, 11,000 farmers who willingly sold are likely to object if their land were bagged by unwilling farmers, when they had actually given it for an industrial project. Indeed, they, too, are in court challenging the Act.

Still, the court's comments have breathed fresh hope into the "unwilling" farmers of Singur. They have waited seven years. They took a leap of faith when Banerjee told them their land would be returned. But so far, they have neither received the compensation offered from the state government (because they refused to accept the cheques and thereby became unwilling) nor the land. They remain the biggest victims of Banerjee's populist politics.

August 2, 2013

Money chase unites two M’s

Mumbai, Aug. 1: Amit Mitra delivered Mumbai’s business stars for Mamata Banerjee today. The question now is whether the stars will deliver for the chief minister what she wants them to: investments. 

The finance minister, saddled with the difficult task of managing Bengal’s straitened circumstances, put the full force of his persuasive skills developed during his earlier stint as Ficci secretary-general into play to get top industrialists and bankers for the meeting with the chief minister.

A beaming Mamata said later: “I am very happy at the turnout. My expectation was 100 per cent but it exceeded my expectation.” 

The chief minister — whose first investor meet in Delhi last December was a flop — had reasons to be happy as Mitra offered her both quality and quantity at the meeting at the World Trade Centre at Cuffe Parade in south Mumbai. 

In attendance were Reliance chairman Mukesh Ambani, Godrej boss Adi Godrej, JSW Group’s Sajjan Jindal, RPG Enterprise’s Harsh Goenka, Pantaloon’s Kishore Biyani and Amit Kalyani of Bharat Forge. Top bankers — Uday Kotak of Kotak Mahindra and ICICI managing director Chanda Kochhar — were at hand, too.

The most notable absentee was Tata Sons chairman Cyrus Mistry, though one group representative did show up — N. Chandrasekharan, the managing director of TCS that has development centres in Calcutta. 

Investment is critical for Mamata, who landed in Mumbai with a massive mandate in the rural polls, because of the absence of employment opportunities. Though the Trinamul government has been claiming that it has received proposals worth over Rs 1.2 lakh crore since the change of guard in Bengal, it has little to show in terms of actual investment. 

Asked if the meeting brought forth any concrete proposal, Mamata avoided a direct reply. “It cannot be done this way. We have made our points. Bengal is a gold mine, I told them. They should now decide what to do,” she said. 

Although a meeting of this nature was not quite expected to yield tangible gains, Mamata — often portrayed as anti-industry for her Singur agitation — scored on two counts. 

First, she managed to draw a packed audience, which would help silence her critics for some time. Some industrialists The Telegraph spoke to said they had come because of Mitra. “I was at the meeting because I could not say no to Amit Mitra,” said one of them.

Mamata’s second success was winning a bouquet of praises, with one industrialist describing her after the meeting as “charming”. 

“We have seen your passion on TV, today we felt that in person as you addressed us,” Kochhar said, according to tweets by Derek O’Brien, Rajya Sabha MP and Mamata aide. 

Ambani, the biggest draw, said the fact that she had come to Mumbai within 48 hours of a landslide victory “means you mean business”, according to O’Brien’s tweet.

Later, Ambani met the chief minister at the Sahyadri Guest House. The Reliance chairman, accompanied by Reliance Gio head Tarun Jhunjhunwala, is believed to have brought to Mamata’s attention the roadblocks to rolling out 4G services in Bengal.

At the meeting, the industrialists avoided asking tough questions either because they did not wish to offend the chief minister or they were not interested enough in Bengal.

To questions about land, Mamata said 10,000 acres were available with the government. But the fact is that most of this land is in small parcels. 

Speaking to The Telegraph after the meeting, Goenka summed it up. “It went off really well. She certainly won the hearts of the people, but she has to also win the purse of the people.


Why Mukesh Ambani met Bengal CM Mamata Banerjee

Ambani is known to have discussed key matters in a one-on-one interaction with Banerjee after the meet

West Bengal Chief Minister ’s meet with the who’s who of India Inc in Mumbai turned out to be a runaway hit, courtesy Reliance Industries’ .

According to a tweet by Trinamool Congress’ Derek O’ Brien, Ambani was believed to have said that the Chief Minister meant business, given that she was in Mumbai barely 48 hours after a big electoral victory. But it’s not just Banerjee who meant business.


After the India Inc meeting Ambani met the Chief Minister one-on-one at the guest house where she had put up. State government sources said, none of the other state ministers were present during the meeting.


“HPL and 4G were the key matters discussed. He (Ambani) was very keen on 4G but HPL too was important on his agenda,” industry minister, Partha Chatterjee said, but added that no one was allowed to inturrept the one-on one between Banerjee and Ambani.


On the 4G front, the company plans to lay optical fibre cables across 5,500 km. It would use 3,500 telecom towers to support its 4G services in the state. Work has already started on laying cables across 300 km, the company management had said during a recent conference in the state. The investment in the project was around Rs 3,000 crore.


However, Haldia Petrochemicals Ltd (HPL) could just higher on Ambani’s priority. HPL, eastern India's biggest petrochem company, has been on the radar of RIL for quite some time. RIL has submitted an expression of interest for the state government’s 40 per cent stake. The five other bidders are Anil Agarwal’s Cairn India, Essar, IOC, ONGC and GAIL.


The plant visit, as part of the due diligence process, started on Thursday wherein the bidders would visit the plant, which according to HPL's former MD Partha Bhattacharyya could boast of international quality products. 


While RIL has formally joined the race for HPL now, its interest is an open secret. In 2006, Ambani had come down to meet Buddhadeb Bhattacharjee, who was the Chief Minister then. 

“Ambani said, I will come if you want me,” a senior Left leader said.


The state government was keen on selling its stake to Ambani, but an agreement with TCG’s Purnendu Chatterjee for the first rights of refusal, held it back. Ambani was asked to settle the matter with Purnendu Chatterjee directly, but it didn’t result in anything material.

This time too, the stake sale could get entangled in a legal battle. TCG has already filed an appeal in Supreme Court against a Calcutta High Court order. TCG wanted to move the international court of arbitration, against which the state government had moved the High Court.