Wednesday, December 9, 2015

BUDDHADEV'S RETURN TO POWER

FROM BUSINESS WORLD OF 27 MAY 2006


A vote for status quo


The human mind thirsts for answers, but is luckily usually satisfied with obvious ones. There is no lack of simple explanations for the win of the Communist Party (Marxist) in West Bengal. The most obvious is its unbroken 26-year record of monopoly power in the State. It would have been news if CPM had lost; its win is not. But the magnitude of its majority is remarkable, especially since it was led this time by a new chief minister, and one who has so often stepped off the Marxist path his predecessor trod with such success in his long reign.
Buddhadev Bhattacharya has consistently courted capitalists and used their institutions and instruments to sell West Bengal to them. With his plain talking and his habit of keeping his word, he has won admirers outside the state and the party. Such friends should make him all the more suspect in the eyes of his party, which has made hostility towards outsiders its USP. He has by and large carried it along, but enthusiasm for him has not been glaringly evident.
That is what made the elections interesting. They were less a popularity poll for CPM than a test of Bhattacharya’s hold on its reins. The pre-election rituals suggested that the party was still its crotchety, unreconstructed self. Campaign speeches were still thunderous denunciations of class enemies, to whom this time, the Election Commission was added because it stultified some of the party’s dirty tricks. The shrillness with which the party chieftains reacted to the cleaning up of the rolls and curbs on intimidation created an impression that the party was really afraid of facing a fair election – and that it would do badly in this one.
It is in this context that Bhattacharya’s achievement must be viewed. He led a party out of tune with his procapitalist policies and demoralized by the Election Commission’s sanitary drive to a huge victory. No doubt the victory was not his alone; his adversaries gave him a helping hand. The Congress is dependent on the goodwill of the CPM at the centre, so it did not try too strenuously to contend with it in the state. Mamata Banerjee, who had built up a stronghold in the cities with her populism, was done in by her alliance with the BJP which had outlived its usefulness.
Still, Buddhadev Bhattacharya’s association with success is welcome. The electoral win will reassure investors and assuage their doubts. Ratan Tata, for instance, very likely waited for the election results before announcing his intention to set up an automobile plant in West Bengal. The Salim group may also now raise its stake in the state. Others will follow if Bhattacharya can work up a convincing sales pitch.
Chief amongst the state’s strong points is its power supply. When CITU gangs began to invade offices and attack managers in the 1960s, Gujarat used to send officials to Calcutta to lure industrialists with the promise that there would be no strikes, no gheraos, and no dharnas in Gujarat; Bhattacharya should now send emissaries to Maharashtra and invite its industrialists to come and see for themselves that power does not even trip in Calcutta. His appeal would be greater, however, if the emissaries included CITU officials to convey assurance of industrial peace.
West Bengal’s weakest point is its finances. West Bengal is amongst India’s most indebted states; it pays over a half of its revenue in interest, and even after receiving central grants it has to borrow to pay salaries and pensions. As a result, the State has been spending little on infrastructure; if infrastructure is not strained, it is because of the low level of economic activity. But that low level also means low tax revenue, which limits public investment.
Asim Dasgupta, who has been finance minister for 15 years, may not be responsible for this perilous situation, but he has certainly used his wits to cover it up. However, a crisis cannot be postponed much longer. It could take the form of inability to pay salaries, deterioration of infrastructure, or a sharp rise in taxes. Whichever form it takes, it will take some able handling; there must be some doubt whether Dasgupta is the man for it. Unfortunately, Bhattacharya does not have much choice in his legislative party or even his state; he may need to look further for talent. The earlier he does so, the better. For public finances are the darkest cloud of the horizon of West Bengal; unless it passes, fiscal uncertainty will deter major investors.
Meanwhile, Bhattacharya will be much sought after, not only within his state, but in Delhi and beyond. The PM will look for his help in dealing with the chronic bad temper of the Karats and Bardhan; the party will beg for resources to spread itself into other parts of India. Meeting all the demands on him will not be easy; but then, Buddhadev Bhattacharya likes to take up difficult challenges. He will not go short.