India Post News Service NEW DELHI: What the Communist parties had been doing to the Central government for the last four years is now being done to them by Mamata Banerjee in their home state of West Bengal -namely blocking of industrial progress. If it did not hold tragic consequences for the country one would be tempted to applaud Mamata Banerjee for giving it back to them.

When Ratan Tata unveiled the world's cheapest car 'Nano' at an exhibition in Delhi early this year, it attracted worldwide attention. It promised to help some of the 7.2 million Indian two-wheeler buyers migrate to the four-wheel category at the rate of 250,000 Nanos every year. The western press marveled at the Rs 1 lakh ($ 2500) price and since then many big carmakers have caught on to the potential and announced plans to make smaller, cheaper cars in competition.

Tata was to roll out the 'Nano' in October but his pet project in West Bengal village of Singur has been stalled in a land acquisition controversy of such messy proportions that he has threatened to quit West Bengal and take his Nano factory elsewhere. Within hours of Tata's threat, at least six states - Punjab, Uttaranchal, Rajasthan, Andhra, Karnataka, and Gujarat - responded by offering similar and better facilities for the re-located Nano plant and many others are joining the queue. But the fact remains these are promises on election eve and similar disruptions in these states cannot be ruled out. Remember when it was unveiled early this year; invitations to set up similar plants came from Africa and South America.

Vietnam and China are also ready to host the plant. It is not merely Indian states who want the investment and prestige of having the Nano to roll off their roads; other countries would like to make world history and would give anything to have India's star innovation manufactured on their soil. The questions being asked are, far from foreign investment, is investment by Indian companies also unwelcome in India? Instead of envisioning big picture development and making it possible, Indian politicians seem to revel in disrupting ongoing development projects for small gains. The Communists may have ideological reasons for opposing multinational investments but under Chief Minister Buddhadeb Bhattacharjee in West Bengal, they are trying to revive industrialization which involves farmland acquisition on a large scale.

There is certainly a problem over inadequate compensation to the farmers and the government has, after the controversy, promised to double the rate. But Trinamool Congress leader Mamata Banerjee is playing up the farmers' emotional connect with land and demanding return of 400 acres. She won the panchayat elections in Singur by exploiting the farmers' anger and has now galvanized the local people in demanding that the land acquired by Tata be given back to them.

She has sensed a cause that could help her rise phoenix-like after her bad showing in the 2000 assembly elections. That the 1000 acre land acquisition has shrunk to a war of attrition over 400 acres has less to do with the "unwilling" farmers who declined to accept the "compensation package" and more to do with politics. Manjeet Kripalani of Business Week says this is not merely a setback for Tatas or Nano but a time of reckoning for the entire Indian industry. She predicts a "brain drain" of not individuals but Indian companies.

She writes in her column, "To keep India growing and industry productive, several reforms are needed. Infrastructure for better distribution, access to natural resources to fire manufacturing, land reform for an agri and industrial revolution and massive education and vocational institutes to train talent. These are not forthcoming. So private Indian capital, which had been investing at home these past five years, is now moving to foreign environments that will let them prosper. She says, "Indian companies create benefits wherever they go abroad.

According to Amit Mitra, Director General of FICCI, in the last two years Indian companies have created an estimated 70,000 new jobs in the course of their global acquisitions, half of those in the US alone. "China doesn't have to go abroad to get technology, international management, scale, global market access and category leadership, because its government allows foreign investment into the country, which in turn propels China forward. China has its problems, but it still creates more employment through open investment policies than India does.

Indian companies, on the other hand, work with their hands tied behind their backs at home, imprisoned by both regulation and politics. So it's easier to go seek their fortune on more even global ground. States of industry Statewise the picture isn't very rosy. West Bengal is already reeling under shortage of new investments in the industrial sector. The state is burdened with an anti-business image, which the Chief Minister has tried very hard to change. Officially, the State has 35 million unemployed people and 70 per cent of the 1,730 industrial units in the state that have commenced production recently have done so with investments of less than Rs 10 crore.

The Nano project could have created and driven on a new road, which other industrial groups would have followed. After being ruled by the Left Front for 30 years, West Bengal has made the life of investors more difficult, compared with other industrialized states like Karnataka, Andhra Pradesh, Gujarat and Maharashtra. It takes 105 days to get and register a property in Bengal, as against 35 days in Andhra Pradesh, 15 days in Maharastra, two days in Karnataka and just a day in Gujarat. When it comes to total number of mandays required to complete the process of setting up an industry, only Orissa is behind West Bengal.

For Bengal, it is 317 days, while for Karnataka it is 113, Andhra Pradesh 261, Gujarat 116 and for Maharashtra, it's 270 days. A survey has been done by the Indian Chamber of Commerce (ICC) on "Single Window Investment Facilitation: Status in some Indian states" among the six representative states. It suggests that except Orissa, West Bengal is lagging in almost every aspect when it comes to provide better investment environment.

A World Bank report has listed the economic transformation that Orissa is attempting, for which it is getting little national attention. With the Supreme Court clearing Posco's project, with other big-ticket investment in place and with Chief Minister Navin Patnaik's reformist instincts in place through nearly two terms in office, the state is an experiment in a poor province reinventing itself. An indicator of the improving economy of Bihar is that a Patna based company called the Security and Intelligence Services (SIS) India Limited has taken over the Australian guard and mobile patrol services business of American conglomerate, United Technologies Corp (UTC). The deal includes Chubb Security which is Australia's largest and oldest security company.