Bloomberg News

Kolkata Bosses Appeal to Goddess as Singh Ally Deters Investors

November 07, 2011

Nov. 5 (Bloomberg) -- Aditya Birla Group executive R.P. Pansari wants Lakshmi, the four-armed goddess of wealth, to step in where the government has failed.

The Kolkata businessman is taking time out of the office this week to chant prayers with about 20 of his peers as they seek divine intervention in the fortunes of the Indian state of West Bengal. Their enactment of the ancient Hindu ritual of yagna, more typically invoked to ask for rain or bless a new house, is in its eighth day today with as many as 500 priests attending 100 ceremonial fires, making it the biggest such event Pansari can remember.

“We are offering our prayers to please Lakshmi, so she gives her blessing to this part of the country,” said Pansari, 55, senior president at the group’s Kolkata-based Essel Mining & Industries Ltd., after clasping his hands in front of the fire and making an offering of clarified butter. “Within one year, the state should see more investments and employment.”

West Bengal, which borders Bangladesh, Bhutan and Nepal, is struggling to attract investment and create jobs six months after an ally of Prime Minister Manmohan Singh ended 34 years of Communist rule, pledging to turn Kolkata into an Indian version of London. Instead, Chief Minister Mamata Banerjee has put the interests of local farmers first, backing laws that make it hard for companies to acquire land and in the process deterring investors such as Tata Motors Ltd., which moved a planned car plant to the western state of Gujarat.

Farmer’s Votes

Across India, disputes between villagers and companies over land purchases have hampered projects such as a $12 billion Posco steel plant in the state of Orissa and a highway from New Delhi to Agra, the city of the Taj Mahal. While politicians chase the votes of the nation’s 234 million farmers, with 130 million people set to join the workforce over the next decade the government must boost infrastructure and manufacturing in states like West Bengal to avoid social unrest.

Since Banerjee came to power in May, there have been no major investments in the state, according to P. Roy, director general of the Bengal Chamber of Commerce and Industry in Kolkata. The rest of India has attracted projects from companies such as Ford Motor Co., General Electric Co., and Hyundai Motor Co. in the past year. Foreign companies poured a total of $20.8 billion into India in the first eight months of 2011.

“The idea is to bringing prosperity back to Bengal,” said Sanjay Budhia, managing director of Patton India, a maker of plastic storage tanks. “Policies of the state government are what will bring investments but inspiration is also required.”

Singing in Sanskrit

Banerjee this week rejected criticism that the government had not delivered on its manifesto promises. “I just need some time,” she told reporters in Kolkata Nov. 2.

At least three attempts to reach Amit Mitra, the state’s finance minister, and Partho Chatterjee, industries minister, seeking comments on the state’s business policy, failed because their cell phones were switched off.

Santosh Kheria, 44, a managing director of Navjyoti Cotton Mills, has taken this week off work to take part in the rituals, being held about 20 kilometers (12.5 miles) from Kolkata. He has been praying from 7 a.m. until 9 p.m. each day, singing hymns in Sanskrit and pouring offerings onto the fires.

“At the moment, no one wants to work in West Bengal,” Kheria said. “What we are doing is changing the mood and mind of the people. It is already having an impact. By doing this, we can really make a change to West Bengal.”

Maoist Rebellion

The eastern province, India’s fourth-largest with about 91 million people, has the lowest tax collections in the country, spent 34 percent more than revenue last year and paid the most in interest costs on borrowings, Reserve Bank of India data show. It has the country’s third-largest number of people living in poverty, according to a University of Oxford study in 2010.

Government controls on industry imposed by the Communists when they won power in the 1977 elections, militant labor unions and a Maoist rebellion in the early 1970s chased away factory owners, forcing workers and professionals to leave the state. Among those who left Kolkata, then known as Calcutta, was Lakshmi Mittal, now the chairman of ArcelorMittal and, according to Forbes, the world’s sixth richest man.

A perception that Banerjee is anti-business along with problems of weak infrastructure and corruption have deterred investment, according to Laveesh Bhandari, a director of Indicus Analytics, an economics research firm in New Delhi. In the run up to this year’s election, Banerjee said she would “rebuild the industrial might of Bengal” and create 20,000 jobs.

Return Land

“There is definitely a view she is pro-poor, not pro- business,” said Bhandari, who has written a report about how to boost the state economy. “West Bengal also has whole range of nuts and bolts problems that deter companies coming in to set up.”

The Salim Group, chaired by Indonesian billionaire Anthoni Salim, and its partners, dumped a plan to build a chemical industrial estate in the state following protests by Banerjee’s Trinamool Congress Party in 2007 that led to the death of 14 people.

Banerjee cemented her reputation in 2008, when she spearheaded a campaign demanding Tata Motors abandon a near- complete facility to build the Nano small car in Singur, about 1 1/2 hours outside of Kolkata, and return land to farmers. Tata Group Chairman Ratan Tata is now reluctant to invest in the state after spending 14 billion rupees ($285 million) to move the facility to Gujarat.

“When there is a feeling to satisfy that there is no hostility against us, we will invest in the state,” Tata told shareholders in August. Tata Group is India’s largest business group.

Work With Business

Supporters of Banerjee claim that the Chief Minister is willing to work with business and her policies will strengthen the state’s economy with time.

“Banerjee has changed over the years,” said Kamal Bajaj, a Kolkata-based stock market investor. “She is becoming pro- industry and is willing to cooperate and work. She is so popular because she seems like someone who really wants to do something good for the state.”

H.M. Bangur, managing director of Kolkata-based Shree Cement Ltd., thinks the politicians need to do more. He is among the executives organizing the nine-day ritual. The yagna, which will end on Nov. 6, is only “symbolic,” he said.

“Deity worship alone won’t bring investments to the state,” he said in an interview. “The state should make some sacrifices.”

--Editors: Sam Nagarajan, Arijit Ghosh

To contact the reporters on this story: Pradipta Mukherjee in Kolkata at pmukherjee7@bloomberg.net; Andrew Macaskill in New Delhi at amacaskill@bloomberg.net

To contact the editors responsible for this story: Arijit Ghosh at aghosh@bloomberg.net; Peter Hirschberg at phirschberg@bloomberg.net


Tim Cook's Reboot
LIMITED-TIME OFFER SUBSCRIBE NOW
 
blog comments powered by Disqus