Sensex dark cloud, Cal silver lining?

‘‘We want the economic reforms to continue,’’ said Bhattacharya after the poll verdict, ‘‘but we want it our way.’’

What’s ‘‘our way?’’

Consider the manner in which he has gone about selling the sick PSUs:

• The state government enlisted the help of PriceWaterhouseCoopers to study the condition of 16 struggling PSUs.

• Securing an assurance of funding from Britain’s Department for International Development (DFID)—to the tune of about $50 million—the government looked for strategic partners in 10 companies in which it said it saw some hope of revival.

• The 10 companies, including engineering, steel mill and biscuit making factories, together have an annual loss of Rs 63 crore.

Their accumulatd interest cost is about Rs 370 crore. Some of these companies are Shalimar Works, National Iron and Steel Co, West Bengal Chemical Industries Ltd, Lily Buiscuits Co Pvt Ltd, Krishna Sllicate and Glass, West Bengal Plywood and Allied Products Ltd.

• Last September, these were opened to private bidders and the government was ready to offer a stake of 51 to 74 per cent with management control since it had no money to invest in their recovery. The government says that so enthusiastic was the response that the deadline was extended.

• Of the 16, two were found to be ‘‘beyond any hope of recovery’’ and the government decided to close them.

• As for the remaining four, the government decided to provide financial help, as it felt they did not need much funds to get back on their feet.

Most radically, the government said it was open to ‘‘job cuts’’ in these companies. The government has been working out an ‘‘Early Retirement Scheme’’ and with DFID funding, set up a safety net of sorts for employees who are laid off: counselling, ‘‘training and re-skilling’’ them for new jobs.

To the criticism that labour reforms will get stalled, Left leaders point to the state government’s bold IT policy under which units are declared as ‘‘public utility services,’’ sparing them from strikes, and removing the old mantra of an eight-hour shift.

Having accepted that companies in IT-enabled services catered to clients, domestic and foreign, who demanded 24x7x365 model of service, the state government drafted new rules to ensure such operations.

Similar labour rules have been drafted for exclusive agricultural export zones in the state—in Malda (known for its mangoes), in Siliguri (known for pineapples) and Burdwan (for potatoes).

Even ‘‘contract farming’’ has been introduced in these zones. At the same time, however, the government ensured that there was no change in the land holding rights and pattern.

Bhattacharjee’s government has also opened up the infrastucture sector to foreign help. While Britain’s DFID is active in social infrastructure, Japan plays a key role in helping build roads, bridges and flyovers. Incidentally, West Bengal also happens to be the site of the single largest Japanese direct investment in India, a fibre intermediates plant by global major Mitsubishi Chemical Corp at Haldia.