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India - Red tape strangling West Bengal industry

Two years ago, two foundry park projects were planned in Coimbatore and Kolkata. As of August 2008, the one in Tamil Nadu has been up and running for nearly 16 months but the one in the city of joy has proved a pain for the investor. It is stuck somewhere in the maze of red tape and paperwork in the state secretariat.

Buddhadeb Bhattacharjee’s ‘do-it-now’ slogan had impressed the industry. Many, like the Indian Foundry association (IFA) — the apex body for over 270 foundries in the state — were taken in by the promise. It didn’t take long for the bitter truth to sink in.

The Coimbatore foundry started operations in just eight months but no one knows when the one planned in Kolkata’s outskirts will get operational clearance.

IFA has realised that the so-called “Hindu pace of growth”, as far as industrial procedures are concerned, remains unchanged in Marxist Bengal.

IFA chairman Pawan Surekha is pretty upset that the foundry project in Howrah has yet to cross bureaucratic hurdles.

Vice-president of the Chamber of Textile Trade & Industry (Coti), Arun Bhuwalka, shares the same feeling. He is desperately trying to set up a textile park in Bengal but not much has moved in the last one year.  A first generation Bengali entrepreneur, B N Bhattacharya, is facing an even bigger problem. He bought some land in Dhulagarh Industrial Estate in 2005 to set up a biotech unit. But he has still not been able to convert the land for industrial use, far less start work on the project.

Way back in 1995, the West Bengal Industrial Development Corporation (WBIDC) launched the much talked about ‘single window’ system, called Shilpa Bandhu. The aim was speedy clearance of industrial proposals to encourage investment and prevent entrepreneurs from being harassed. But after 13 years, a large section of entrepreneurs feels that there is no single window for industrial proposals in Bengal.

Barred windows The total time required for clearing projects in Bengal is among the longest in the country. The worst victim of its absence are small and medium scale enterprises.

Surekha alleged that there is no single window in WBIDC. “You can call it ‘a multiple window’. We have to go to each department for permission and certificates. Be it pollution, water or land,” he said.

Commenting on a recent study by Indian Chamber of Commerce (ICC), he said the real picture is even worse. The study suggests that it takes 333 days to get all the approvals related to set up an industry in the state. “You might get an approval in principle but its execution needs a lot of time. Just pollution clearance takes more than 300 days,” he pointed out.

Surekha is heading for Coimbatore to see the progress made by the foundry that beat Kolkata hands down.

WBIDC seems to be basking in a glory of its own making. Officials insist clearances come quickly in Bengal but the truth is revealed in industry surveys. Obtaining and registering land, for instance, is done in just 30 days, the WBIDC claims.

But a study by ICC found it took at least 105 days. And the industry’s real experience is that it may take up to a year.

Managing director of Tata Metaliks and former president of Indian Chamber of Commerce, Harsh Jha, made no bones about the fact that industrial procedures still take a long time in Bengal. “There is enormous scope for improvement. An improvement of even 10-15% will have a massive impact on the economy of the state,” he said. Commenting on the study conducted by ICC during his tenure as its president, Jha said that it is “conservative compared to the real picture”. 

The chairman of Rupa & Company and president of Bharat Chamber of Commerce, P R Agarwal, said that the single window has not worked up to expectation. “Land transfer and land use procedures for industry are a real problem,” he pointed out.

The vice-president of Chamber of Textile Trade & Industry, Arun Bhuwalka said the single window was “only on paper”. “We have to run from pillar to post for approvals. The system is there but it is not functioning properly. There is no accountability in the lower level of administration. So nobody works,” he said. President of Merchants’ Chamber of Commerce (MCC), Anupam Shah suggested that West Bengal should take up the Gujarat model for streamlining procedures. “The time taken here is 2-3 times more than in Gujarat,” he remarked.

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