Modi’s Rival Seeks to Shake Populist Tag in Singapore VisitSharon Chen and Bibhudatta Pradhan
India’s West Bengal state has secured at least $32 million in infrastructure funding from Singapore, as Chief Minister Mamata Banerjee looks to shake off perceptions of being less business-friendly than Prime Minister Narendra Modi.
Singapore’s Government Investment Corp. will invest through private equity HDFC Property Fund for a planned town in the state capital, while InfraCo Asia will help develop a food park, according to two statements from the West Bengal government.
“This is a start,” Amit Mitra, minister of finance, commerce and industries in Banerjee’s government, said in an interview in Singapore. “If individual Singaporean companies want 20 acres, 30 acres, 50 acres, 100 acres, 200 acres” of land, “it’s available right now,” he said.
Banerjee’s administration and Singapore will jointly set up a business center in Kolkata, formerly known as Calcutta, to facilitate ties with the city state, according to a statement on the party’s website yesterday. This is her first overseas tour since she took office in 2011, ending 34 years of communist rule in the state that comprises 7.5 percent of India’s population and attracted just 1 percent of the nation’s overseas investment since 2000.
There have been no major investments in the state since Banerjee took power, said Nilotpal Basu, a leader of the rival Communist Party of India (Marxist). In 2008 Banerjee had headed a campaign demanding that Tata Motors Ltd. return land acquired from farmers to build a factory and in 2012 had pulled out of the ruling coalition, opposing the then government’s decision to allow foreign retailers into India.
“Because of past experiences a big concern for investors is whether her government will stick to its commitments and move ahead with it,” said Shishir Bajpai, senior vice-president at IIFL Asset Management Co. in Mumbai. Her government carries an image of being “populist and not pro-business” and other states are offering better opportunities to investors, he said.
West Bengal has lured foreign direct investment of about $884 million since April 2012 compared with Maharashtra’s $13 billion and Gujarat’s $1.4 billion, government data show. That’s about a third of the $2.8 billion received by Banerjee’s state since 2000.
The eastern province, with a population of about 91 million people, posted economic growth of 7.71 percent in the financial year ended March 2014, the ninth-fastest among the 32 regions tracked and higher than the national 4.7 percent rate. West Bengal’s fiscal deficit stood at 1.9 percent during that period compared with 1.4 percent in Gujarat and 1.1 percent in Maharashtra.
Banerjee, whom supporters call “didi” or ’elder sister’ in Hindi, was among Time magazine’s 2012 list of the world’s 100 most influential people. Her All India Trinamool Congress party won 34 of 42 seats in West Bengal in this year’s parliamentary elections and is the fourth-largest party at the center.
West Bengal has a single-window clearance process and a landbank comprising 10,000 acres, Mitra said. Banerjee has offered a 1,000 acre plot to the Singapore Manufacturing Federation, he added.
Keventer Agro Ltd. and Singapore’s InfraCo Asia are collaborating to develop Dankuni Food Park that will have an investment of over $165 million, according to a statement from the West Bengal government. Singapore’s Changi Airport International said in a letter to Banerjee it will increase its stake in Bengal Aerotropolis Projects Ltd. to 32.3 percent from 26 percent, according to a separate statement.
Singapore’s GIC will invest $32.5 million in the planned $1 billion Calcutta Riverside project, which will include houses, schools and a movie studio complex.
“And we hope to have another 10 such projects in the next one year if you have a center,” Mitra said, referring to the planned business center. “There will be many projects to come.”