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Assocham plan on new industrial clusters in WB soon; signs MoU with UNIDO
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Tuesday, 11 October, 2011, 08 : 00 AM [IST]
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Our Bureau, New Delhi
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ASSOCHAM will soon unveil a strategy to set up industrial clusters in West Bengal for small and medium enterprises involved in food processing, handicrafts, renewable energy and information technology to generate three lakh direct and indirect jobs over the next three years and help in inclusive growth.
The Associated Chambers of Commerce and Industry of India (ASSOCHAM) recently signed a memorandum of understanding with the United Nations Industrial Development Organisation (UNIDO) to establish clusters of small and medium enterprises in two districts of the state.
They will be identified during a day-long summit titled Rising Bengal - The Land of Opportunities being organised by the chamber's Eastern Region Development Council in Kolkata on October 15. Nearly 350 industry leaders, policy-makers, investors and other stakeholders will attend the meet that will identify potential areas of development and new business opportunities.
The summit will be inaugurated by state minister for commerce and industries Partha Chatterjee in the presence of chief secretary Samar Ghosh and other senior government officials. Chief minister Mamta Banerjee has been requested to address the gathering.
The blueprint jointly being brought out by PwC and ASSOCHAM on all-round West Bengal development is expected to be a ready-reckoner for investors, the Centre and state governments to make the state as one of the most attractive investment destinations in India, said Annirudh Dhoot, co-chairman of the Summit Organising Committee.
The chamber has also set up a dedicated Foundation for Development of Micro Industries and Clusterisation to promote micro, small and medium enterprises (MSMEs) across the country.
Sunil Kanoria, chairman, eastern region development council, ASSOCHAM, said that strategically-located West Bengal should rejuvenate agriculture, create manufacturing hubs and accelerate growth in the services sector to emerge as a gateway to south-east Asia as the country pursues Look East Policy.
The agenda of new state government should be to prioritise building social and physical infrastructure to spur economic activity and ensure inclusive growth. The agricultural and industrial scenario at the moment seems to be lagging, he said.
China has overtaken the United States as the largest trading partner of India and that has kept ports in eastern India very busy. With merchandise trade with Asian nations growing faster than that with the West, the share of eastern ports is set to rise.
"Our trade with Japan, Singapore, Indonesia and Thailand is increasing at a rapid pace," said S N Nandy, co-chairman, eastern region development council, ASSOCHAM. "This will lead to increased business opportunities and overall growth for state and cities on the eastern coast."
West Bengal acts as a natural corridor to northeastern states like Assam and can leverage that to the fullest by increasing trade with these states, he said. Similarly, it can also coordinate with Bihar, Jharkhand and Orissa having huge natural resources to become a formidable force in the eastern coast.
The state had about 1,000 live investment projects worth Rs 5.81 lakh crore last year. Manufacturing sector acquired the lion's share of 39.3 per cent followed by power 33.5 per cent and real estate 5.5 per cent.
"The policies for attracting investments need to be in tune with market realities and tailored to the needs of West Bengal," said Kanoria. "Development of physical and social infrastructure in the next five years will drive and sustain economic growth," he added.
The state may not have enough finances to develop infrastructure on its own which builds a good case for public private partnership (PPP) type of initiatives involving multilateral institutions like the World Bank and the Asian Development Bank.
Land is a key driver for industrialisation, said D S Rawat, secretary-general, ASSOCHAM. "The challenge before state government is to address the issue from a holistic perspective keeping in balance between agriculture and industry. The share of industry as percentage of net state domestic product at factor cost is 10 per cent compared to 28 per cent in Gujarat," he said.
Red tapism has been a big challenge in West Bengal to attract investments. The administrative process must be conducive and simplified to cut down on a number of days required to start a business. Kolkata features a low ranked 12 among major cities in terms of doing business. This needs to be improved.
The state government's public finances are currently quite alarming. West Bengal is the leading state in per capita debt with Rs two lakh crore in debt. Nearly 97 per cent of its expenditure is on account of salaries, pensions and interest payments on past loans.
The brunt of this has been borne by lack of investments in infrastructure or the delivery of social services - areas where spending levels are more discretionary.
In the short term, the state government needs to broaden the base for indirect tax collection and restrict revenue leakages with fast-tracking e-governance initiatives, said Debmalya Banerjee, co-chairman, eastern region development council, ASSOCHAM. On the longer term, it needs to facilitate industrial development for boosting revenue
collection.
Financial inclusion can also be a key enabler for economic development of the state, he said. The government can encourage micro-finance initiatives and engage with banks to have innovative schemes for small borrowers. An effective banking correspondent model can take care of problems of supply and demand factors to a great extent as the rural
population is still not aware of facilities available.
To encourage effective distribution of agro-commodities, initiatives should be taken to create hub-and-spoke model under which districts and towns identified act as a hub and villages surrounding them act as spokes. This will ensure efficient distribution, reduce transportation costs, increase competition and real price discovery, benefiting the
farmers.
At the same time, industries clusters can be created for micro, small and medium enterprises to ensure common facilities, thus reducing operating costs and increasing competitiveness and skill development around that sector.
As Kolkata and some key districts like Midnapore, Bardhaman, North and South 24 Parganas are ahead in terms of economic development, the real focus of state government should be strengthening these centres and also bring the backward districts - particularly in north Bengal - up to speed, said ASSOCHAM.
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