The social infrastructure of West Bengal has witnessed a significant consolidation and improvement during the last few years, particularly in the real estate sector. The state has undertaken several unique social improvement programmes along with the Central government schemes, such as MNREGA. The state has seen a rise in the purchasing power of the people of rural and semi-urban areas.
This is the state that has topped in the Ease of Doing Business index with 99.73 points on a scale of 100. That is probably one of the reasons why the state ranks number one in having the highest number of MSME units, ahead of Uttar Pradesh and Maharashtra.
Sitaram Sharma, president of Kolkata-based Bharat Chamber of Commerce and managing director of Mironda Trade and Commerce Pvt. Ltd spoke to SME Futures on the business environment in West Bengal, ease of doing business and the rise of MSMEs.
According to a recent survey, West Bengal has the largest number of MSMEs!
Our state has been a forerunner in making the state’s ecosystem habitable for MSMEs. This is because of a very supportive policy and special thrust given by the government of West Bengal to the MSMEs to make them competitive, in terms of innovation, market linkages and resilience. The performance of the 60 lakh MSMEs could have been much better if the shocks of temporary dislocations caused by demonetisation and introduction of GST were not there. In addition to the policy support, if our MSMEs could be helped for technological upgrade, they could be more competitive, not only at home but also in the global markets.
Four sectors have outperformed amongst all the sectors that have been put under the industry rubric in terms of advance estimates of gross state value added (GSVA) for 2016-17.
There is no doubt that social infrastructure of our state has witnessed a significant consolidation and improvement during the last few years, particularly in the real estate sector. Besides, effective utilisation of various unique social improvement programmes of our state government as well as the programmes of the government of India like MNREGA, 100 days work, etc. have improved the purchasing power of the people of the state, rural and semi-urban, in particular. In the circumstances, the growth in the sectors has been natural and has largely contributed to the gross state value added (GSVA). The classification of these sectors as leading once appears to me to be in order. However, the contribution of agri and horticulture and food processing sectors, as well as tourism, also needs to be reviewed to access their contribution to the GSVA. There has also been major jump in exports from West Bengal which was Rs 30,644 crore in 2010-11 and achieved a peak of Rs 63,731 crore in next four years.
The state has performed well in services sector! Is it safe to say the ease of doing business in these sectors is more, especially for the MSMEs?
Definitely. West Bengal has topped amongst all states in the Ease of Doing Business index by achieving 99.73 points on a scale of 100 and at the same time. The state at the same time ranks number one in terms of number of MSME units, ahead of Uttar Pradesh and Maharashtra. And the rise in MSME units in the state actually occurred because of ease of doing business. These are co-related factors as well. The outstanding performance of these sectors has so far been brought forward by the MSMEs and will continue to do so in the future, given the state government’s efforts in improving business conditions. New initiatives by the government of West Bengal such as single window services set up at industry facilitation centre in every district and launching of ‘my Enterprise web portal’ to provide a quick and simple way to access all information for setting up MSME has helped achieve this. Similarly, launching of MICRO Business Credit Card for MSME also helped to a great extent.
Given that the ferro-alloys sector recently has passed through a difficult phase how do you find the business environment of the state?
My company Mironda is not an importer, but a start export house with export of ferro-alloys, silico-manganese and chrome. Being a trader exporter, we procure material largely from manufacturing units in West Bengal, mostly MSME. The ferro-alloys sector recently passed through a difficult phase with several units closing down. However, the worst is over and with steel industry looking up Ferro-Alloys units are also on the path of recovery. Our exports were little affected due to delay in refund of GST which needs further streamlining. I will say, the business environment in the state is good and improving.
You have been a close observer of the state’s development scene for over five decades. If you have to look into the future, what will be your prediction?
West Bengal’s history always remains an eventful one. It never strolled in a straight line. This has been so mostly due to geopolitical factors. The state has been unique in accommodating continuous influx of refugees. I do not think that the economy of any other states in India has been affected as much as West Bengal’s in rehabilitating these unfortunate people. Thereafter, due to various political reasons, West Bengal had to witness industries departing from the state. The next phase was growth in revenue expenditure of the state government compared to the revenue earnings leading to mounting loans and interest payments.
There is no doubt that the current state government has been successful in transforming the state from a state of languishing economy to a state of economic prosperity. Added to this, the success in ease of doing business has definitely placed West Bengal on a high growth trajectory. We seem to be now riding a straight line of exponential growth and not moving into the trough. With a paradigm shift in labour policies, the state has moved to a “No Bandh” regime to ensure a disciplined work atmosphere in the state. Moreover, right to public services act enacted to ensure time-bound service delivery has also made a positive impact. The successive Bengal Global Business Summits (BGBS) with BGBS 2017 announcing 2.35 lakh crore rupees of business announcements has been contributing to changing perception about West Bengal. That is in brief assessment of future, as I see it.