Haldia, Jan. 16: Industry has urged the Bengal government to focus on capital investment incentives to attract big projects, suggesting a shift from the current policy that gives equal stress to employment generation potential.
The suggestion reflects the modern-day reality of technology-driven manufacturing processes but carries a political risk in a state where unemployment is high and industry was being reluctantly ' and belatedly ' seen as a cure-all pill.
"In Bengal, the incentives are linked to employment. You get 50 per cent incentives based on your investment and 50 per cent based on employment," said Vivek Agnihotri, the business head of Ambuja Cements Ltd.
He was speaking at a panel discussion on "Manufacturing Industries: Prospect and Growth in West Bengal" at Bengal Leads 2013, the three-day investment summit and exhibition that will conclude tomorrow, in Haldia.
Ambuja Cements has planned investments of Rs 550 crore in Bengal. Agnihotri suggested that the state should come up with a policy that would be able to attract bigger capital-intensive investments here.
He added that in Bengal, the duration of incentives is only five years compared to Maharashtra (where the company has a unit) where it is 18 years.
Incentives are financial support given to industrial units in the form of subsidies and waiver of duties. In Bengal, incentives to medium and large units are offered under a policy drawn up in 2008.
Asked about his opinion, state industries and commerce minister Partha Chatterjee said the economic condition of the state was different from that of the others. But he pointed out that the state was working on a better incentive policy.
"We are in the process of formulating a policy on incentives. We shall consider the incentives offered by other states. The situation in our state is not the same. Even then, whatever we can, we will accommodate," Chatterjee said.
A city-based economist pointed out that with technological advances, the production process has become more capital-intensive. While this can pose a dilemma for a labour-intensive state like Bengal, the state government must keep in mind while formulating policies that capital-intensive production is more efficient, he pointed out.