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.
