LAND POLITICS CONTINUE IN WEST BENGAL; BUSINESSES NOW

UNCLAS KOLKATA 000267 SENSITIVE SIPDIS PASS TO SCA/INS E.O. 12958: N/A TAGS: PGOV ECON IN SUBJECT: LAND POLITICS CONTINUE IN WEST BENGAL; BUSINESSES NOW WORKING WITH EMBOLDENED TRINAMOOL REF: Kolkata 164 ¶1. (SBU) Summary: Recent statements from business leaders and politicians reinforced the idea that land acquisition will continue to be a political obstacle for businesses in West Bengal. Business leaders have recently begun acknowledging the importance of working with both the government and the opposition to build political support for commercial projects. Comments by party officials further illustrated that the All India Trinamool Congress (AITC) is taking steps to prepare for its anticipated rise to power in West Bengal. By contrast, the Communist Party of India - Marxist (CPI-M) does not seem to have a detectable strategy for reversing its streak of electoral losses. End summary. ¶2. (SBU) During a September meeting with Acting Deputy Assistant Secretary (DAS) Michael Owen, several members of the American Chamber of Commerce (AmCham) concurred that business conditions in West Bengal will continue to be difficult for the next few years. They cited challenges to land acquisition, infrastructure weaknesses and a failure by the Government of West Bengal to implement solutions to known problems. Several commented that the state government appears today to be less supportive of investments than it was several years ago, perhaps a result of the recent high-profile failures to woo new investment. ¶3. (SBU) Speaking about Tata's pullout from Singur, Partha Chatterjee, AITC General Secretary and Leader of Opposition in the state assembly, told DAS Owen that Tata did not consult AITC on the Nano manufacturing plant. However, Chatterjee added that businesses are now approaching his party to discuss projects, which is consistent with remarks by AmCham members who told DAS that they are now engaging both CPI-M and the opposition. ¶4. (SBU) Chatterjee expressed optimism about his party's chances in the Kolkata municipal elections in 2010 and the state elections in 2011. He is confident of success, so long as the party "does not make any mistakes." He described efforts, such as a youth rally planned for the end of October, to recruit new leaders and mobilize its base. He indicated that the AITC plans to expand its political operation outside of West Bengal and contest elections in Arunachal Pradesh, Jharkhand, Bihar and Tripura. ¶5. (SBU) Interactions with Biman Basu, CPI-M's party chairman, were less fruitful. When asked about his party's strategy for the 2011 state assembly elections, Basu said it was too early to have a strategy. He had the same response about the municipal elections in 2010. Similarly, Basu did not point to any specific efforts to recruit and groom new CPI-M leaders. ¶6. (SBU) Comment: Post conversations confirm that the business community has shifted allegiance away from the CPI-M and towards the AITC. Investment in the state will continue to be hampered with political uncertainty and a lack of political consensus on investments. TAYLOR