Bengal is in raptures at the end of another investment carnival. A confetti of numbers rained over the seventh Bengal Global Business Summit: a total of 188 memoranda of understanding were signed, promising investment worth Rs 3.76 trillion in an industry-starved state. Investment jamborees have turned into great theatrical opportunities for self-indulgence, make-believe and bragging rights. The first summit in 2015 had yielded investment proposals worth Rs 2.47 trillion — which apparently suggests that investors are now ready to commit 54% more funds now than they did eight years ago.
The Indian economy has been growing at a cracking pace since the pandemic broke in 2020. Real GDP rose to 7.2% in the year 2022-23 according to the provisional estimate that the National Statistical Office put out in May. Investments rose by 11.4% when measured in terms of the proxy called gross fixed capital formation. The truth is that most of this investment came from government spending. Private investment has been woefully sluggish. An analysis by the Centre for Monitoring Indian Economy carried out in September said that the aggregates drawn from its CapEx database showed that the private sector’s appetite for large new investments has been subdued. Private sector investments in 2023 touched a record Rs 13.4 trillion in January-March this year but then started to tail off. It fell to Rs 6.6 trillion in the April-June quarter and then slumped to Rs 1.22 trillion in the July-September quarter, says the CMIE.
Promises do not cost a dime. One of the biggest state-level jamborees will be held in January next year in Gujarat where another tidal wave of investment proposals is expected. But the sobering truth is that many of the announcements made at these vanity fairs will not eventually be implemented. Sometimes, they can turn into a sideshow of intrigue and pique over frayed relationships. In April 2022, Gautam Adani was the showstopper at the investment summit and had promised to invest Rs 100 billion in Bengal over a decade. Later that year, the Mamata Banerjee government handed over a letter of intent for the deep-sea Tajpur port which the Ahmedabad-based tycoon had won in a bidding war with the Jindals. Just over a year later, political compulsions seem to have throttled economic considerations. Ms Banerjee artlessly spoke about the possibility of floating a fresh tender for the port, which seemed to leave the Adanis high and dry. Such gamesmanship does not send out the right signals to the investment community.
Bengal has a lot to offer. It is the sixth largest state in the country and, if statistics are to be believed, ranks in the top quartile with an average economic growth rate of 12.6% between 2015 and 2021. But more than anything else, it is an open, inclusive society with a large pool of talented workers. Ugly politics and preconceived views about Bengal should not be allowed to limit its appeal as an investment destination.
