Shillong, November 5: The Bengal Global Business Summit (BGBS) 2023, an annual event organized by the West Bengal Government to promote the state as an attractive investment destination, is slated for November 21 to November 23. However, this year’s summit is shadowed by two significant developments.
As per IANS, firstly, the Arbitral Tribunal’s recent ruling on the Singur land issue has come as a blow to the state government just days before the grand event. The tribunal, comprising three members, has determined that Tata Motors is entitled to a compensation of Rs 765.78 crore, along with 11 percent interest per annum from September 1, 2016. This compensation is related to the closure of Tata’s Nano car project in Singur, Hooghly district.
While it’s unlikely that this issue will be openly discussed during BGBS-2023, the tribunal’s decision is expected to cast a shadow over the proceedings and generate discussions among the attendees during the event’s inaugural session. It remains uncertain whether representatives from the Tata Group will be present at the business summit.
The second challenge facing the West Bengal Government is the release of unfavorable economic indicators, highlighting the state’s fiscal struggles and its heavy reliance on central grants compared to its own revenue generation. According to data from the state finance department, central grants, which encompass the state’s share in central taxes and grant-in-aid, make up 139 percent of West Bengal’s own revenue, including both tax and non-tax revenue, for the fiscal year 2022-23.
Economists argue that this wide disparity between central grants and the state’s own revenue is due to limited avenues for generating tax revenue and the absence of substantial investments that contribute to state tax components. Notably, state excise is the primary source of the state’s own tax revenue.
The budget estimates for the fiscal year 2023-24 project a 19.41 percent increase in state excise collection, reaching Rs 17,921.56 crore, compared to the revised figures for the fiscal year 2022-23 at Rs 15,001.39 crore. In contrast, the state’s own tax revenue is expected to rise by only 12.69 percent to Rs 88,595.54 crore in the fiscal year 2023-24, up from the revised estimates of Rs 79,500 crore for 2022-23.
Economics teacher P. Mukhopadhyay expressed concern about West Bengal’s overreliance on state excise duty as the primary revenue source, attributing it to the lack of avenues for tax generation from major industries. He also noted that the state’s land and SEZ policies are not conducive to attracting substantial investments.
Industry observer and columnist Santanu Sanyal echoed these sentiments, emphasizing the need for a more transparent reflection of investment proposals and their implementation in the state’s economic figures. Despite claims of receiving significant investment proposals after each annual business summit, the actual impact on West Bengal’s economic data remains elusive.