Negative tribunal order, negative indices to overshadow WB biz summit
Kolkata: The Bengal Global Business Summit, the annual event held by the West Bengal Government to showcase the state as an ideal investment destination will be held this year under the twin shadows of the negative order against the state by an Arbitral Tribunal on the Singur land issue and the adverse economic indices of West Bengal’s much higher dependence on central grants than the state’s own revenue.
The BGBS-2023 will be held from November 21 to November 23, but the state government has had a big shock just days before the mega event due to the ruling of the Arbitral Tribunal. The three-member tribunal has ruled that Tata Motors is entitled to recover from West Bengal Industrial Development Corporation a sum of Rs 765.78 crore with interest of 11 per cent per annum from September 1, 2016, till actual recovery.
This is compensation to the company for the closure of its Nano car project in Singur in Hooghly district.
Industry observers feel that although none of the dignitaries present at BGBS-2023 will raise this issue at the forum, but the tribunal’s order will cast a pall over the proceedings and definitely create a buzz among the audience present at the inaugural session of the event.
It is not yet clear whether any representative/s from the Tata Group will be present at the business meet.
The second cause of embarrassment to the West Bengal Government just ahead of the business summit is the release of the negative economic indices that highlights the poor performance of the state’s finances and its failure to attract big-ticket investments to push up its own tax revenue generation.
As per statistics of the state finance department, the share of central grants, which include both, the state’s share in central taxes and the grant-in-aid, is 139 per cent of West Bengal’s own revenue, which include both, tax and non-tax revenue, as of the last financial year 2022-23.
Economists feel that the difference between the central grants and state’s own revenue becomes so high when there are limited avenues for the state’s own tax revenue generation and lack of big-ticket investments that generate maximum state tax components.
However, during successive years, the state excise is the maximum generator of the state’s own tax revenue.
As per the budget estimates for the financial year 2023-24, the state excise collection is slated to rise to Rs 17,921.56 crore, up by 19.41 per cent from the figure of Rs 15,001.39 crore as per the revised estimates for the financial year 2022-23.
Whereas, the state’s own tax revenue as per the budget estimates for 2023-24 is slated to increase by just 12.69 per cent to Rs 88,595.54 crore from the figure of Rs 79,5000 crore as per the revised estimates for 2022-23.
Economics teacher P. Mukhopadhyay said that barring those states where prohibition is in place almost all states have high dependence on state excise duty to garner the tax revenue. “But in the case of West Bengal, the state excise is the principal revenue earner, which is not a healthy sign and this is because there is no avenue for tax generation for big industries. At the same time, the current land and SEZ policies of West Bengal are not really conducive for attracting big-ticket investment,” said Mukhopadhyay.
Seconding him, industry observer and columnist Santanu Sanyal said that after every annual business meet, Chief Minister Mamata Banerjee claims to have received lakhs of crores of investment proposals. “But the reflection of those proposals is never witnessed in the figures of the Department for Promotion of Industry and Internal Trade, which gives a state-wise break-up of investment intentions received and implemented, not just on an year-on-year basis but also on a month-on-month basis,” Sanyal explained.