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May 18, 2011

Can Mamata Banerjee Remake Bengal?

 

At 1 PM on Friday the 13^th, Buddhadeb Bhattacharjee drove into the sprawling, colonial Governor`s House in Kolkata and put in his papers, becoming the second chief minister in 44 years to not only lose power, but also his own seat.

Across the city in a narrow lane in Kalighat, besieged by a sea of green gulal smeared faces and waving tricolours, a diminutive woman in a plain Dhanekhali saree acknowledged victory over the world`s longest-running elected communist regime. On Friday, Mamata Banerjee will take oath as Bengal`s first woman chief minister.

In booming India, there`s no other regime that`s stumped by a question like this. So, to understand what the Trinamool-Congress administration is really up against, it`s important to understand the rot in a system gnawed away by the communist party-state for 34 years.

The Kashipur seat is 300 km west of Kolkata in the waterless, red earth district of Purulia, bordering Jharkhand. People here are lucky to get five days work out of the promised 100 from the Centre`s NREGA scheme, with payments delayed by three to four months. You have to travel more than 1 km to fetch water and people migrate as far as Rajasthan and Tamil Nadu for jobs.

Kashipur`s only hospital is a wreck without doors and windows. It was abandoned six years ago, when the government said it would build a new hospital 2 km away. In 2005, the CPM`s Hashim Abdul Halim, the longest-serving speaker of any legislature in India, came here and announced with much fanfare that the abandoned hospital would be turned into a hostel for Adivasi students.

That never happened. “The local politician held a feast and mela in the nearby Joychandi Hills and that was that. They think we`re fools and they can do whatever they want. What we wanted is Poribartan, change,” said Nilmoni Barui, a local. Poribartan was the slogan Mamata Banerjee rode to power, one word for the change of regime which caught on like wildfire across Bengal.

Kashipur is typical of the devastation that`s overtaken the state`s healthcare in the last 30 years. With less than 4 beds for every 100,000 villagers, Bengal today is at the bottom of the heap among all states in terms of rural healthcare. Tamil Nadu, with more than 68 beds is right on top. (See chart below).

1. Healthcare
State (select states)	Govt hosp beds, rural (per 1 lakh population
All India	17.5
West Bengal	3.8
Haryana	6.9
UP	8.2
Himachal Pradesh	44.1
Uttarakhand	53.2
Kerala	54.6
Tamil Nadu	68.2
(Source: National Health Profile, 2009)

From sweepers and nurses to government doctors, the Left made sure that all owed allegiance to the party`s coordination committees. Sheltered under the party`s giant red umbrella, nobody could ask them to do any work; salaries were paid for obedience to party.

A few days earlier on her election campaign, Mamata Banerjee was speaking at a rally in Borjora, in the district of Bankura, just south of river Damodar. She`s decided to attack the Left`s education policies: “For our kids, it`s `oey ajagar ashchhey terey` (the Bengali verse to teach alphabets). But for the children of Left leaders, it`s `twinkle, twinkle little star` and jobs as barristers when they graduate,” she thunders.

She`s talking about the Left`s 1980s policy of scrapping English as a medium of teaching from government schools, something that crippled many Bengali children`s abilities to get mainstream jobs or compete in national examinations for nearly 30 years.

“It`s a pity that English was taken out of the curriculum from many schools and given a low priority, so parents who could afford it, sent their children to private schools or to schools outside Kolkata,” says Sandipan Chakravortty, president of the Bengal Chamber of Commerce & Industry.

Whether you measure it in terms of student-teacher ratios or enrolment numbers, Bengal punches way below pan-India averages. But as economist Abhirup Sarkar of the Indian Statistical Institute points out in a recent paper, it`s not just the numbers, the Left had massively dented the quality of education in the state: “This decline is solely due to widespread political intervention by the CPM in the educational sector.” Whether they`re heads of universities or primary school teachers, everybody had to be a party stooge, vetted by comrades in Writers` Building. (See chart below).

2. Education
Primary student/teacher ratio
All India	46
West Bengal	50
Gross enrolment ratio
All India	94.8
West Bengal	90.25
Dropouts
All India	61.6
West Bengal	75.1
(Source: Selected Educational Statistics, GoI, 2005-06)

 “There`s been a massive erosion of human capital and skills through 30 years and that`s become a major drag on the entire economy. It`ll be one of Ms Banerjee`s greatest challenges. If she can boost education, healthcare and the work culture of the state, a lot of the work will be done,” says Sarkar.

On arrival, the Frenchman L de Grandpre wrote, “The Square (later named after Dalhousie) itself is composed of magnificent houses which render Calcutta not only the handsomest town in Asia, but one of the finest in the world.” That was in 1803, when the British in Bengal were moving from trade into manufacturing.

Less than two decades after the British left, large manufacturing projects turned away from Bengal. Its first chief minister, Bidhan Chandra Roy set up what are probably the only large post-Independence projects in the state, between the years of 1948 and 1962 – the Chittaranjan Locomotive Works, Durgapur Steel and the massive Damodar Valley Corporation, modeled after America`s Tennessee Valley Authority.

Apart from sputtering Haldia Petrochemicals and a clutch of IT projects, the Left had nothing to show for the last 34 years. Compared to fast-industrialising states like Tamil Nadu, Maharashtra and Gujarat, Bengal is a laggard. That shows in the numbers: from 1980, three years after the Left came to power, the state`s share of India`s manufacturing has fallen off a cliff. (See chart below).

3. Industry
Share of W Bengal in all-India manufacturing
Year	Share (%)
1980-81	11.5
85-86	8.9
90-91	5.9
95-96	5.3
2000-01	3.9
2005-06	3.1
2007-08	2.9

 One big reason for the flight of capital was political violence in Bengal from the late 1960s to the mid-1970s. Another was the Left`s agitation, while in Opposition, against the Congress which it termed, “Tata-Birlas` government.” In power, the Left continued its politics of strikes and agitation.

Recently, as ex-chief minister Bhattacharjee tried to woo businesses back to the state, the red unions went about shutting down work: in 2006, of the 20 million man days lost in labour disputes across India, Bengal accounted for 62%. The next year was even worse: 27 million man days were lost across India, with Bengal alone snatching away 87% of the total. Naturally capital, which had voted with its feet, has preferred to stay out. (See chart below).

4 Labour disputes
Mandays lost in industrial disputes (in million mandays)
Year	Mandays lost (in mn)
2006
All India	20.3
West Bengal	12.5
2007
All India	27.2
West Bengal	23.7
(Source: Indian Labour Statistics, GoI)

 Can the new regime convince businesses to invest in Bengal? Sajjan Jindal-controlled JSW Steel, which has committed to a Rs 35,000 crore steel-and-power plant in Salboni, seems bullish enough. Construction should finish in three years. “The first thing I`d expect Mamata Banerjee to do is to change perceptions and dispel negative impressions about Bengal,” says Biswadip Gupta, joint MD & CEO, JSW Bengal Steel.

Privately many businessmen mutter about their two darkest fears. One, that the Left, now out of power, will throw its entire organizational energy into creating industrial unrest on a massive scale. “It could look like the 1970s all over again,” says a businessman requesting anonymity, “Strikes, shutdowns and violence, it could get really nasty.”

But Harsh Jha, MD, Tata Metaliks Ltd feels that the popular mood has swung away from the pessimism of Bengal`s troubled years, “Already, there are examples where people have protested against blockades, they`re fed up with bandhs. They want development and a leadership that`s accountable as Bengal embraces industry.”

“Young people in Bengal now want opportunities for work, to build careers. That`ll automatically force political parties to take a development-oriented approach,” agrees Harshavardhan Neotia, chairman, Ambuja Realty. 

Mamata Banerjee, Bengal`s new chief minister, is even more emphatic, “Trinamool has never started industrial strikes, we don`t want bandhs. We`ll work constructively with industry. Industry is welcome as long as it respects the dignity of the people.”

 The other lurking fear that businesses have is whether newly-minted labour unions of the Trinamool, flush with victory, will attack the Left`s entrenched unions. That could create havoc on every shopfloor in the state.

Mamata Banerjee wants to dispel all notions that her party is spoiling for a fight. “Look, I`ve told the people of Bengal that we want badal (change), not badla (revenge). The people have accepted this and voted for us. Now let`s move on, there`s a lot to be done.”

She`s correct, there`s a mountain of work that waits for her attention in the sprawling red-brick Writers` Building. One major headache will be the terrible state of Bengal`s finances. Expenses are huge and wasteful, with lots of money being funneled out to the state`s bloated workforce as salaries and pensions. Revenues are a trickle.

“Financing is a problem,” says Sugata Marjit, Director of the Centre for Studies in Social Sciences, Calcutta. He believes that debt has to be spent sensibly, on investment rather than wasteful expenditure and revenues should be boosted. But that brings us to a puzzle: Bengal`s revenues are stubbornly low, even when compared with other relatively backward states like Bihar.

“Agriculture is not taxed, industry is stagnant and the main business activity is trade where tax evasion is rampant,” says Omkar Goswami, chairman, CERG Advisory.

Indeed, today`s Bengal seems to have slipped back in time to the first 100-odd years of British rule when it was a trading post, with Burrabazar in central Calcutta emerging as Asia`s largest wholesale market. Today, there are two entrepots or trading hubs: Kolkata with its port in the south and Jalpaiguri and Siliguri in the north, gateways to India`s northeast.

“Bengal is now a giant Burrabazar,” says Sarkar, “It might make sense to impose trade taxes on some of trading hubs to boost revenue in the short term.” Over time, as industry kicks in, revenues ought to pick up.

At Rs 33,300, the average resident of Kolkata earned more than twice as much as the average resident of the state in 2000-01. Indeed, unlike Maharashtra, Tamil Nadu or Uttar Pradesh, Bengal is largely a one-city state, with Kolkata defining its cultural and political agenda for decades.

This isn`t necessarily a good thing. The city has been swamped by people affected by Partition in 1947, war in 1971 and economic misery in the hinterland for over 200 years, becoming in Satyajit Ray`s words, a `jana aranya` or `people jungle`. Kolkata`s infrastructure is strained to the limit, creating often-unbearable political tensions.

To pull things out this mess, Mamata Banerjee`s advisors, Sarkar among them, will tell her to create new cities away from Kolkata. This will help take some pressure off the city and boost investments away from the densely populated – and fertile – hinterland of Kolkata. It makes sense to build large projects in arid Salboni or Purulia, rather than in Singur, 40 minutes from Kolkata, where the land is so fertile that locals call it sonamati, or gold-earth.

Ms Banerjee`s job won`t be easy. In fact there`s no template for her to work with: after all she`s the first person in independent India`s history who will replace a regime that has ruled continuously for three and a half decades. But she has the goodwill, hope and the aspiration of people to aid her. That`s three things Bengal`s comrades have run out of.