Saturday, September 6, 2008

"Brand Bengal" It's High Time To Rethink


West Bengal is one such state of India where a single political party and their allies have been the ruling government for more than three decades. The pace of industrialization in this left-liberal state has been nevertheless slow as compared to all other major states of India. The withdrawal of the Tatas from the Singur project is yet another plight, another result of political intrigues which is resulting in a pyrrhic victory for the opposition party. If the Tatas go, they will take with them almost everything that matters to Brand Bengal. Image and the big bucks. The first entity doesn't carry a price tag but the second one does: a whopping Rs 80,000 crore in investments.



The immediate loss will be over Rs 5,000 crore, including the investments on the ancillary units in Singur. The list would also include tier-II vendors, who will have no reason to be here once Ratan Tata moves out. What's more, the Tata brands like Tata Realty Infrastructure, Tata Metaliks and Maithon Power Limited might also take flight, amounting to a loss of at least Rs 10,000 crore. Besides, there are other bigtime investors who are already jittery. Bharat Forge, which had decided to invest big time in Bengal largely because of the Nano plant in Singur, is now in two minds. The company would have brought in Rs 6,500 crore. This top-of-the-line forging company had signed an MoU with the government earlier this year. Ever since trouble erupted in Singur, their response to the state industries department is: We'll get back.



Brand Bengal had attracted investment announcements of Rs 1,27,302 crore since the third quarter of the last financial year. But this target is now a distant dream. In case of a Tata pullout, there will be a question mark on the investment from nonferrous metal major Vedanta Group. That will be another Rs 16,000 crore gone. Then, there are steel majors who would have implemented their projects this year, but are apprehensive now. All these steel majors, including Adhunik (Rs 5,000 crore), Shyam Steel (Rs 8,000 crore), Jai Balaji (Rs 16,500 crore), Bhushan Steel (Rs 4,000 crore), and Abhijit Group (Rs 8,000 crore) may not be all that keen to invest.



Once the Tatas pullout it will send a negative signal to the investors' mind and they would either imitate the steps of the former or procrastinate their decision. The Tata Group is respected as an organization around the globe, and in India it is synonymous with "stability, sustainability, and reliability". A mere callous attitude of semi-literate politicians just for the sake of gaining political mileage would abjure the interest of the investors resulting into permanent damage to the economic growth of the state. It is high time that the people of Bengal give a second thought to building up "Brand Bengal"; if not now, then never!

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