Apex industry body ASSOCHAM has proposed to partner with the West Bengal state government for setting up industrial clusters in sectors like food processing, handicrafts, renewable energy and information technology to achieve the double digit growth and generate four lakh new jobs in the next three years.
Registering a compounded annual growth rate (CAGR) of about 5.6 per cent between 2005 and 2010, the industrial sector in West Bengal accounted for nearly 19 per cent share in the state domestic product (SDP) in 2009-10. Manufacturing, construction, electricity, gas and water supply are certain key industrial activities.
Manufacturing and construction have emerged as two significant industrial activities and grew at a CAGR of 5.3 per cent and 6.3 per cent respectively during the five years to March 2010.
“With share of industrial activity in West Bengal’s SDP falling year on year, the e-cluster based approach to develop micro and small scale industries is the key to realise the double digit growth potential of the state,” said Mr Dilip Modi, president of The Associated Chambers of Commerce and Industry of India (ASSOCHAM).
While releasing the chamber’s study title ‘Double Digit Growth in West Bengal’ along with Mr S.N. Nundy, Mr Debmalya Banerjee, co-chairmen of ASSOCHAM Eastern Region Development Council, and Mr D.S. Rawat, chamber’s national secretary general, Mr Modi said, “Strategically-located West Bengal should rejuvenate agriculture, create manufacturing hubs and accelerate growth in services sector to emerge as a gateway to south-east Asia as the country pursues Look East Policy.”
There is enormous scope for development of machine tools, leather, electronics, food processing, petrochemical and IT clusters across the state and there is an urgent need to revitalise the manufacturing sector through creation of clusters, he said.
ASSOCHAM recently signed an MoU (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.
Mining, quarrying, forestry and logging activities put up a dismal show in the agriculture and allied activities carried out across the state as the sector grew by about 3 per cent CAGR during 2005 and 2010 and registered a share of about 19.4 per cent in SDP in 2009-10.
According to ASSOCHAM, an investment of nearly Rs 84 crore has gone into about six agri export zones (AEZs) set up across the state which account for annual exports worth nearly Rs 90 crore.
AEZs in the state are focused on processing Darjeeling tea, lychee, mangoes, pineapples, potatoes, vegetables in the districts of Darjeeling, Dinjapur, Cooch Bihar, Jalpaiguri, Malda, Midnapur and Murshidabad.
West Bengal holds tremendous potential for growth and development of the domestic food processing sector.
The state government needs to encourage the private sector for extending research and development, training facilities and providing critical infrastructure like cold chains, cargo complexes for perishable food products to give an impetus to agro-food processing and agri-exports. Besides, there is a need and scope for diversification into other commodities and fruits as well.
The policies for attracting investments need to be in tune with market realities and tailored to the needs of West Bengal. Development of physical and social infrastructure in the next five years will drive and sustain economic growth.
The services sector in the state grew at about 10 per cent CAGR during 2004-05 and 2009-10 and accounted for about 61 per cent in the state domestic product.
West Bengal attracted 974 live investment projects worth over Rs 6.4 lakh crore as of September 2011 registering an increase of about 9.5 per cent over previous year.
Manufacturing sector acquired the lion’s share of about 43 per cent in the total live investments followed by electricity (30 per cent), services (20 per cent) and real estate (6 per cent).
Over 51 per cent of these investments are in different stages of implementation while about 44 per cent were in announcement stages and about four per cent of total investment projects were stalled due to various reasons.
The state has attracted a share of 4.6 per cent of total investments worth Rs 139 lakh crore announced by both private and public sector across the country as of September 2011.
West Bengal accounts for about four per cent of the total investment undertaken by different government sources and over five per cent of the total private investment across the country.
ASSOCHAM called for developing infrastructure across the state through public-private partnership (PPP) to reduce transaction costs. The state needs to restrict itself to the role of regulator while private sector develops and manages industry and services sectors.
The state must develop minor ports in coastal areas and connect them to industrial corridors. ASSOCHAM urged the state government to constitute a maritime board and a single window agency for development of ports, inland waterways and SEZs in these areas.