Industrialization strategy for Bengal

This is an article which appeared in HT in early 2006

Industrializing West Bengal : 5 Priorities

West Bengal has a population of over 80 million.

It is densely populated. If we leave out Delhi and Chandigarh, West Bengal is the most densely populated state in India with over 1000 people per The figure was 904 in the 2001 census,closely followed by Bihar (880)and Kerala(819).In contrast, the some of the leading states which attract industrial investments have a far lower density of population (Maharashtra-314,Andhra Pradesh 275,Gujarat 258 ).

West Bengal has faced an influx of population from the effects of partition. It again did in 1971 during the Bangladesh liberation war. Traditionally, Bengal has attracted migrant labour from neighbouring states and it still has porous international borders that make the issues of rapid industrialization of Bengal more complex.

Neither agriculture nor the new wave of knowledge industries have the capacity to absorb the large addition to the Bengal labour pool every year. The answer must be found in rapid industrialization in combination with a leap in agricultural productivity.

The current debate of agriculture versus industry is a completely misplaced one. Bengal needs a harmonious strategy that skillfully combines dramatic increases in agricultural productivity and output, establishment of manufacturing and other labour-intensive industries, services, entrepreneurship and knowledge-driven industries. In order to be sustainable, such a strategy must be architected to ensure rapid transformation and inclusive growth. As in the rest of the world, by making dramatic improvements in agricultural productivity,less and less people on less and less land will produce more and more crops and agricultural output.

What needs to be done to achieve the dream of a prosperous Bengal as part of prosperous India? The list can almost be endless but let me prioritize my favourite five.

1. A centre of excellence for knowledge industries

My friend T.R.Mohandas Pai of Infosys has gone on record to say that he believes Bengal has the potential of being the cradle of the 21st century economic renaissance of India. There is a huge potential for knowledge intensive industries in Bengal. To sustain such industries, however, it is necessary to reform the education sector radically and restore meritocracy and excellence in teaching and learning. The colour of the cat must be removed from the equation.

I am not merely advocating the preservation and promotion of existing centres but also creating new centres and reaching out to the broad population not just to the elite. The state cannot abdicate this sector, it must channel more funding while encouraging private investments and even the entry of international academic institutions. Neither state investments nor market forces alone can create rapidly the trained human talent that we need to grow our knowledge-based industries. I am an advocate of fair and transparent regulations (not controls) .And I would go for recommend tough implementation of regulations to ensure quality of education. We need to eliminate players who have entered the education sector simply to make easy money and are providing poor quality education while charging a fortune.

2.Unlocking idle assets and stemming wasteful expenditure

Because of a whole raft of reasons, Bengal, like other states, is saddled with a historical baggage of “sick” industries and businesses most of which the government did not start in the first place. Yet, they are absorbing funds which otherwise could have been used for health, education or poverty reduction. Bengal has already shown success in the JV transformation of Great Eastern Hotel through a transparent bidding process.

Some units which are beyond redemption have been closed down and the value of its assets has been unlocked through sales. In reality, Bengal has the opportunity of turning adversity into triumph. What looks like a sick company without any hope, may actually appear to be a ready infrastructure to an entrepreneur who wants to hit the ground running. He may close down the existing business but bring in new capital, management skills, products and market access and refurbish the existing infrastructure for a brand new business. There is a large infrastructure and land bank locked in sick units waiting to be transformed. With a creative strategy, sick units may become an attractions for companies which want to be up and running fast.

3.Create world-class infrastructure for manufacturing

We know that the existing airport will be modernized, a new, greenfield airport is on the drawing board and a deep sea port is being planned in addition to Kulpi. Urban infrastructure is being built around Kolkata and several towns like Hadia, Durgapur, Siliguri and so on.

We have a plan for expanding the metro rail network and implementing an elevated rapid transport system. We are also planning massive, multi-product Special Economic Zones (SEZ) built to international standards and specifications. Those who build these SEZs do not just bring in capital and technology. They bring in their brands, their assurance of quality standards and most importantly they bring in their established customers who will set up industrial units that will generate employment.

Infrastructure in our country has traditionally taken ages to build and complete. In the car industry, time to market is computed by the time it takes from dream (design) to gleam (shine of polish on the paint of the car) .We must find ways of defining our dream to gleam for these lighthouse projects and monitor the progress with rigour and discipline.

The speed with which we are able to complete these projects may actually dictate the speed of our industrialization. One of China’s biggest competitive advantages is her ability to create infrastructure at a blinding speed. We cannot just hide behind our democratic system and say we can never match their speed!

4. The powerhouse of India

Detractors of Bengal invariably say that this state is surplus in power because this state was more than successful in demand management by driving away capital through organized, militant labour. It must be said that there is an element of truth in this criticism. At the same time, the shortages of power in various other states is not merely due to the surge of industrialization in those states but also due to lack of foresight, planning and vision.

Given its natural advantages, Bengal has the capability of producing relatively low cost power in abundance. Instead of being simply an exporter of power which it now is can turn this into a competitive advantage for attracting industries for which power is critical. I think it is also time to consider nuclear power plants in Bengal.

5.Remaining wedded to diversity, heterodoxy and plurality

One of the greatest intangible assets of Bengal is its demonstrated commitment to plurality, diversity and tolerance. It is one of most underplayed cards. Bengal, across the board, does not have a caste baggage, religious bigotry or parochial divide. In its rain swept city an Albanian nun can be world famous for her tireless work, a tailor affected by communal riots is welcomed to set up home and people of all castes, creeds, faith and persuasion live in harmony, peace and friendship. Silicon Valley succeeded not because the natives were the smartest people. It succeeded because it attracted like a magnet the best talent from all over the world. The assets were San Francisco and the Bay area’s quality of life , cosmopolitan culture, its inclusive philosophy and its ecology of diversity. In a world of global mobility of talent, Bengal would do well to preserve this advantage.

This article was wriiten by Roopen Roy in early 2006 for The Hindustan Times.Views expressed in this article are personal.