People's Democracy

(Weekly Organ of the Communist Party of India (Marxist)

Vol. XXX

No. 27

July 02, 2006

LF Govtís Pro-People Industrial Policy -II


Shyamal Chakrobarty




The public sector, as we all know, is not a socialistic component of Indian economy. In fact Indian capitalism was led to its maturity by this sector.


Nevertheless, the fact remains that the public sector has taken a positive part in shaping the countryís sovereignty besides playing an advanced role in the social sphere. Moreover it has been the biggest and most secure job- provider. It is indeed true that some sick units were taken over by the government only to protect the industry and the lives and livelihood of the workers and employees. These days, thanks to the neo-liberal policies, the MNCs are demanding access to the mines and other basic industries.


In this context CPI(M) insists that the PSUs should be broadly viewed as four distinct categories:

  1. hugely profit-making basic and strategic large public sector units

  2. medium size profitable units

  3. units presently incurring losses but which have the potential to turn into profitable units

  4. units running perpetually in loss and with no hope of turnaround.

Among these the first two types should be retained in the public sector and efforts should be made to resist any attempt to reduce equity. All kinds of R&D institutes have to be kept in the state sector because they play an important role in strengthening the economic sovereignty of the country. In the same way we shall resist indiscriminate extraction of ores from the mines. Moreover there are some PSUs providing public utilities like transport, electricity etc. They should not be judged solely on the basis of profit and loss.


Our clear view is that the public sector has to be reinforced through modernisation, democratisation, curbing of bureaucratisation, and elimination of corruption, strict allotment of responsibilities and allied measures. In the case of units that are running at a loss but have a potential to be profitable all efforts should be made for their revival. If all these endeavours turn to naught, further plans for forming joint ventures may be taken into consideration. And in extreme cases, these may be taken off from the public sector. Whatever be the case, the interests of the workers and employees have to be protected. Wherever the package declared for the workers at the time of closure or sale proves unfavourable, we will mobilise and support the workers in their struggle for a better deal. The government must carry out every transaction with complete transparency and keep the management as well as the workers well informed.


We are not sermonising precepts but actually putting these principles into practice in West Bengal. We are trying in every way to make our profit-making PSUs more modern and efficient. We are bringing improved technology and making the management bodies professionally oriented and up-to-date. Restructuring is being carried out in the service sectors like transport and electricity while retaining them in the state sector. Meanwhile WBSEB and PDCL (the two major power utility units) have turned into profitable organisations. But there is no place for complacency. Efforts are on to get every unit ready to face the forthcoming challenges of competition from private players. 


Keeping in view our accepted guidelines for the whole country the LF government in Bengal has divided its PSUs that are incurring losses into the following three major categories:

  1. Those, which can be made 100 per cent profitable through measures, like clearance of financial liabilities, re-organisation of staff strength, and administrative revamping.

  2. Those, which require capital investment for technological upgradation and may be revived by retaining the requisite workforce or through substitution of some of the existing workers with new workers competent to deal with the new technology or by transparently exploring possibilities for turning the unit into a joint-venture and retaining the old workforce after giving them the necessary training

  3. Those units, which have absolutely no potential for a turnaround, may be closed down and the existing staff may be offered early retirement scheme (ERS). The retired employee or any member of his family may be given suitable training for getting alternative employment.

In the first phase, the state government prepared a project report of about 34 units with the help of an expert agency. It was seen that 4 among them could again be made viable. In total, 1334 employees of these 4 units opted for ERS. Among the four, 2(namely, Durgapur Chemicals and Saxby Pharma) have already become profitable. In the next phase, 15 units were earmarked.1934 employees took early retirement. Of these 3 units (namely, Angel India, Great Eastern Hotel, and West Bengal Chemicals) are going to resume operation as joint sector enterprises. Seven units were offered to private entrepreneurs. Five of them are in the process of being taken over. But no reliable offer has been received till date for the remaining two. For the rest of the units, efforts to find reliable entrepreneurs will start soon. The third phase has marked down 16 units, which do not have the minimum chance of revival. They have been closed down and about 3800 people opted for ERS.


Altogether around 6900 employees have taken ERS. Besides their compensatory financial settlement, they have been offered two other benefits by the state government. The retired employee or his/her spouse is being brought under medical/disability/accident insurance coverage. The risk period will extend till the date the incumbent attains 58 years of age. Furthermore a social safety net programme has been drawn up to provide social security to these people. They are to be given psychological counselling as well as advice about how to effectively invest their money to obtain maximum benefit. Training centers have been set up to provide training for economic rehabilitation of these people. The government is spending Rs 5000 per trainee and has fixed a stipend of Rs 30 per day as travelling allowance for them during the period of training. The training programme is of 6 months duration. 1177 candidates have already taken part in the training schedule till March this year. Of them 462 have either got a job or have become engaged in some self-employment activity.


The industrial advance in West Bengal is taking place through a balanced development of large, medium and small-scale units. The state now tops the list in the number of small-scale units. It ranks second in the country with respect to the quantum of investment in the small and medium sector together. Measures have been taken to assuage the farmerís worry regarding acquisition of agricultural land for factories. A new land acquisition policy has been formulated. The landowner will be given 30 per cent additional amount over and above the current price. The bargadar (share cropper) is going to get 40 per cent of the land value (from the government). If there is any other illegal occupant, he will also be given Rs 10000 as compensation. If the land is the only means of subsistence for the peasant family, necessary training will be imparted to a member of the family so that he can get a job in the upcoming industry.


In our state 72 per cent of the total industries in the large and medium sector belong to the medium-scale category. In this sector individual investment has reached the new high of 10 crores. In most of the cases the investors are local entrepreneurs. In the last Sample Survey report it was mentioned that the number of small-scale industries in West Bengal came to 19 lakhs. The latest Sample Survey (2000-2001) shows that the number has risen to 27.7 lakhs. Now we rank first in the country. We are taking giant strides in the field of IT. Till date about 35000 people are engaged with the IT industry. In the next 5 years the number shall rise to 4 lakhs and above.




Like the rest of the country industrial sickness exists in West Bengal too. But the government is continuing deliberations in the BIFR on about 69 sick/closed units. Of them 19 have reopened. The government had to declare tax relief amounting to about 27 crore 9 lakh rupees and to issue loans to the extent of 62 crores of rupees.


The state government has amended land related laws to facilitate reopening of closed units so that unused land can be sold off and the money may be used to revive the closed industry. The state government has formally declared its intention to help the workers if they decide to reopen the closed factory and run it on a co-operative basis. This is just the opposite of what is happening in Maharashtra, where the factory land is being handed over to promoters. 


Owing to the persistent endeavors of the state government, which include declaration of tax-relief and similar benefits; about 31 tea gardens have reopened in north Bengal.




The LF government is giving a monthly allowance of Rs 500 to each worker of every closed industry including tea gardens. This is a unique thing in India.


PF facilities have been extended to workers in the unorganised sector from 2001. This is another matchless step in the whole country. Both the government and the incumbent are to contribute to this fund. Till now, about 6 lakh 67 thousand workers have been brought under its coverage. Social security measures have been declared for construction workers. The scheme shall cover about 20 lakh workers. Furthermore, workers in the unorganised sector will be brought under medical insurance coverage. The sum assured in each case will be Rs 15000. The worker will not have to contribute anything for this.


There is a gulf of difference between the UPA and the LF government in principle and practice. The Left front is not pursuing in any way the policies of the UPA. The UPA and other non-left governments may do better to follow the policies of the LF government. They may come forward and emulate our vigorous measures for implementing land-reform programmes. Besides land reform, efforts to increase the fertility and productivity of land have achieved significant success. We were a perennially deficient state as far as availability of food was concerned. Now we are producing surplus grains. The historic success of the panchayat system has brought about decentralisation of power to the grass root level and encouraged the farmers to grow more crops.


In 1977-78 the land under assured irrigation round the year was only 28 per cent. In 2005-06 the corresponding figure is 69 per cent. Availability of developed seed covered 28 per cent of land. Now it is 94 per cent. Besides, farmers are now increasingly using chemical and bio-fertilizers almost everywhere. The government has decided that every single piece of barren land will be converted to irrigated land. Diversification of crops will be encouraged. Flowers and fruits are being grown more and more. Steps taken for preservation and processing of oilseeds and vegetables have brought prosperity in rural areas. This has resulted in additional job opportunity of about 225000 per year.


The fact remains that most of the state governments are following the path taken by the Centre. Consequently farmers are committing suicide in many parts of the country. In some other areas people are being forced to move away from their homes in search of livelihood. But the steady advance of West Bengal proves the success of our alternative path. So the votaries of neo-liberal economy, the ardent supporters of Mr. Singh, may gloat in glee that we are following their way. The left of the Left lobby may choose to reside in foolís paradise. The Left Front and the people of West Bengal shall continue to march along the alternative path towards new milestones of success.


(To be concluded)