By IANS
Kolkata : The rioting in Kolkata and the season of unrest over Nandigram preceding it will impact economic progress of West Bengal in the long run, the city’s business community feels.
“From the economic point of view, these incidents of agitation might not affect those industries which are already there but it would have a serious impact amongst those investors who are planning to come to West Bengal and looking at the state as their next investment destination,” Confederation of Indian Industry (CII) Chairman (Eastern Region) and CEO of JSW Steel’s West Bengal operations, Biswadip Gupta told IANS.
He said many investors were looking at West Bengal because of the investment-friendly environment it was trying to project over the past few years.
However, the recurrence of these political agitations and communal flare-ups might change all that and the potential investors could just relocate their projects, he added.
“Stability, be it political or religious, is the main factor for any industrialist. If anything disturbs peace the investors would never go ahead with their business plans in that state. Some kind of inhibition would be there before setting up business there,” said Gupta, who heads JSW Steel’s Rs.360 billion investment for a 10 million-tonne steel plant in Salboni in the state.
Protests over Nandigram atrocities and a section of the population’s anger against extension of Indian visa to Bangladeshi writer Taslima Nasreen turned the metropolis into a scene of flaming vehicles, looting and scampering school children Wednesday, forcing the deployment of the army.
“These types of incidents would definitely affect economic progress of the state. We have seen how normal life came to a standstill due to protests by a section of people,” Hemant Kanoria, vice-chairman and managing director of Srei Infrastructure Finance Ltd., told IANS.
“West Bengal has been politically stable for several years but recently we have seen some political opposition emerging here. There must be opposition in a democratic set-up. However, the government should sort it out through dialogue so that the image of the state remains unaffected,” Kanoria added.
“Wednesday’s incident was nothing but a protest without any definite cause. These incidents do affect business activities in the long run,” said Rahul Todi, managing director of Bengal Srachi Housing Development Ltd.
In 2002, under the leadership of Chief Minister Buddhadeb Bhattacharjee, the Left Front government started wooing investors with gusto.
A number of companies, including the Videocon Group, have already come to West Bengal to set up steel units. Videocon has earmarked an investment of Rs.150 billion to set up a three-million-tonne steel and a 1,200-megawatt captive power plant.
Tata Motors, one of Asia’s automobile giants, is also setting up a Rs.10 billion small-car factory at Singur in Hooghly district — about 40 km from Kolkata — but the project faced huge protests from farmers over land acquisition.
Reliance Industries Ltd. also has plans to invest Rs.40 billion in West Bengal. While Rs.15-20 billion would be invested in agro-retail initiatives, a similar amount would be invested in a natural gas pipeline to be laid from the coasts of Andhra Pradesh and Orissa to the industrial township of Haldia in West Bengal.
“If these disruptions continue, then it might have an impact over business activities in West Bengal. It might also slow down the process of industrialisation,” economist Abhirup Sarkar said.
Bengal Chamber of Commerce and Industries president S. Radhakrisnan, however, refused to accept Wednesday’s violence as a major incident that would have a negative impact on business.
“The incident is condemnable and it should not happen in a city like Kolkata. But I don’t subscribe to the idea that Kolkata’s image has been tarnished due to the incident. I think the character of the city has remained intact,” said Radhakrisnan.
“But at the same time, we all have to accept these types of incidents do affect economic activities in a city,” he added.
In a recent study, the Associated Chambers of Commerce and Industry (Assocham) reported that from 2001 to 2004, a period coinciding with the present chief minister’s tenure, West Bengal saw an impressive 15 percent growth in the state’s Gross Domestic Product (GDP).
West Bengal is the third fastest growing economy in the country. Its GDP in the service sector since 2001 has grown at a blistering 25 percent. Banking and insurance led that sector with 56 percent growth from 2001 to 2004. Finance, real estate and other business services grew by 43 percent during the same period.
Many US firms such as Skytech, NetGuru, IBM and GE Capital have invested in IT ventures, and recently PepsiCo also announced plans to expand its operations in the state.