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Why industrialists prefer Modi to Buddha
A K Bhattacharya
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October 08, 2008

Industrialists always like to deal with governments that are stable, can take quick decisions and are capable of handling political opposition to any idea or project they support.

Till the Left Front took charge of West Bengal in 1977, industrialists were scared of taking up new projects in that state. Even if the government gave the go-ahead, the opposition political parties, then led by the Left, would manage to obstruct the smooth implementation of projects. Even running projects would be a headache.

All this began to change after the Left Front came to power and Jyoti Basu was sworn in as the chief minister of West Bengal. Industrialists realised that the Left Front at the helm was the best insurance they could hope for against industrial unrest affecting their factories and plants in West Bengal.

There were three distinct advantages. One, the Left Front government in the state was stable, with a huge majority the Left parties enjoyed in the Legislative Assembly. Two, Jyoti Basu was the undisputed leader of the government and he was empowered to take the final decision once he made up his mind. And three, the state was left with hardly any opposition political party of any significance.

So, all that an industrialist in West Bengal had to do was to have a good working equation with the Left Front chairman (who headed the Left coalition, of which the CPI-M was obviously the dominant partner) and Jyoti Basu (who headed the state government). Once the industrialists took care of these two offices, they would not face any problem - either from the government or from the employees' unions, which were invariably controlled by the ruling Left parties.

If industries still did not make a beeline for investments in West Bengal, it was primarily because the Jyoti Basu government did not pursue rapid industrialisation with private capital as one of its goals and, of course, it had to contend with an investor-unfriendly reputation that refused to die easily.

In any case, the first ten years of the Left Front rule saw Jyoti Basu spending most of his energies on land reforms and a sustained battle with the Centre to get more public sector investments in the state and a larger share in central taxes. He achieved significant success in his efforts at land reform and managed to convert centre-state fiscal relations into a national issue, but failed miserably in attracting central investments to the state.

A few years after the launch of the economic reforms by Manmohan Singh in 1991, Jyoti Basu also changed his industrial policy and began attracting private investment for industrial projects in the state.

His successor, Buddhadeb Bhattacharjee, built on this industrial policy. It appeared that Mr Bhattacharjee was making some headway in his plan for industrialisation in West Bengal with the help of private capital. If Ratan Tata decided to invest in Singur to produce the world-famous Nano from West Bengal, it was largely because he and his advisors had reckoned that Buddhadeb Bhattacharjee ruled the state like Jyoti Basu.

But what became clear to the Tatas in the last few months was that things had changed in Bengal and these were changes that even Mr Bhattacharjee and his administration failed to recognise and take appropriate remedial measures.

A powerful opposition political party by the name of Trinamool Congress had grown its roots in West Bengal and had won a majority of the seats in the Panchayat elections in Singur.

Worse, Buddhadeb Bhattacharjee failed to act as a chief minister who was in complete command of the situation. His government was stable. Yet he failed to act decisively and quickly to resolve the crisis and face the challenge posed by the chief opposition party in the state. After the Trinamool Congress protests began and disrupted work at Singur, Ratan Tata waited for more than a month before taking the final decision to pull out from West Bengal.

If Tata Motors [Get Quote] has now gone to Gujarat to relocate the Nano project there, it is largely because its chief minister, Narendra Modi, offers those very qualities which industrialists love in a state government. Mr Modi's government is stable, he is known for taking quick decisions and has nothing to fear from any opposition political party in the state. There is no Mamata Banerjee in Gujarat.

Nothing else really matters for industrialists when they have to decide on the location of their projects. The riots in Ahmedabad, Surat and other cities in Gujarat after the Godhra train fire may have been condemned by industry leaders. Minority communities may still not feel safe in Gujarat today. For industrialists, however, Narendra Modi meets all the criteria for choosing his state as their next investment destination.

That is where Buddhadeb Bhattacharjee has lost out to Narendra Modi. Panicked by riots in Gujarat after the Godhra riots, Kutubuddin Ansari, a resident of Ahmadabad, had fled his state and secured a safe refuge in Kolkata.

Narendra Modi lost Kutubuddin Ansari. But that did not come in the way of his convincing the Tatas to set up their prestigious Nano factory.

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