Survive from the stupid suicidal dogmatic decisions

Note : The piece was originally written in 2014 when the CM of West Bengal, Mamata Banerjee was still quite at the peak of her basic popularity, but the hapless intelligentsia, like us the white collar workers, were already quite disillusioned. Singur turmoil was fine, a point had to be noted there, but the final decision she forced was a strategic hara-kiri for the state. Even I wrote a small case study on it and taught at the Strategic Management Class in ICFAI Business School, myself being more of a facilitator rather than a teacher, while the class animatedly debated the CS, exactly IIM style as I was trained. And no-one, I repeat just none, had predicted a possibility that Mamata will force out the plant itself, even after the state was forced to commit an extra payment of 50% to the land-losers (A reporter in ET had given a nice analysis of how a particular farmer can accept the offer, earn by interest nearly double of what he was getting by working in the field along with his 4 sons, get 2 jobs for his sons and the other 2 sons can run shops in the markets coming up). Even me, who always insist of taking care of the entire realm of the possibilities at the beginning of a strategic analysis, had ignored this possibility as infeasible. It was just the tsunami of anger against the 34 year CPM rule that had brought victory to Mamata after such a decision, even a goat wouldn’t have killed her own state in this way. But then came the Infosys saga, a completely unwarranted undesirable decision that was simply illogical and not required at all except getting some image for vote purposes for her. Let’s see. 

After 3 years of strange rope-fight, Infosys has finally thrown in the towel, clearly saying they are not interested in the land without a SEZ status. Right after her first win of the power, Mamata announced that giving out any land to the corporates is against her policy and so Infosys will not get SEZ status. Strangely, after years of persuasion, thanks to Buddha and his IT minister Manab Mukherjee who was doing a fine job I think, Infosys had agreed to set up a base in Calcutta. They were badly snubbed in 1996 by Jyoti Basu and had to go to Bhubaneshwar to set up an eastern base (in which now they have a strength of 30000+, at our loss), and had to be hard played to agree to come over. But the terms were favorable, Infosys is after all a land shark too. Getting prime 50 acre land in Newtown at very favorable prices was a real good opportunity for them and they finally gave in to a good terms. 37.5 acre for the operations, 12.5 for related commercial use, 10000 workers which may go up to 25000 in this facility, immediate investment of 500 crores and another 1000 crores in the next phase (years 4-8). But it took nearly 2-3 years for CPM to make the land ready after receiving the first payment from Infosys, with all facilities like road, sewerage, electricity etc. partly due to the overall stagnancy and handicap that crippled the administration in post-singur scenario. It was a pity that CPM did not do the final processing, i.e. handover of the land and the NoC needed for the Co. from the State Govt. that will allow the Central Govt. to give the SEZ status.

The rest is history, as our next generation will put the blame on us for the backward push that we had. Mamata came to power and announced that they are in principle (the only time we saw some principle in this party – what conviction !!) against SEZ and so no SEZ can be given to Infosys. Just think of it, the state govt, would not lose a paisa for the tag, but they were ready to lose so much of the jobs for which any other state would have given a hand. 

While the state govt. was hell-bent on getting some brownie points for votes, the battle for Infosys was a do or die. Even beside the tax and related infrastructural reliefs and advantage for SEZ, the tremendous paperwork and regulatory trouble invited when you try to tag a non-SEZ center to your 15 SEZ centers are too much to handle. For Even a consultant coming from another location for a few days, would invite a lot of paperwork and accounting regarding temporary asset transfer and project billing and tax treatment is huge and just not an acceptable workload for any company. So, the small props and carrots that the state government were offering were just bullshit and were suitably ignored. 

Finally, Infosys simply got tired and raised their hand when the general IT market went down, a typical industry that often sees a cycle every 8 years or so, and the operation had to be slowed down a little bit for a couple of years. 

Let’s look at what we  lost, in a nutshell :

1)      By the typical IT rule that follows the Mongolian horde in terms of location and resource factors, one of the biggest companies setting shop in a new location always props a few other biggies to follow suit. Infosys 10K jobs would have been followed by another at least 10K jobs (e.g. Accenture have reconsidered their decision to set up a center here and cancelled due to “unfavorable and volatile political condition” (a friend, a top level employee has told me that their years of tough lobbying has gone down the drain because of this fiasco – a top Boss who is a south Indian clearly told them that “if they can behave like this with Infosys, we are equally vulnerable”) from the biggies, and another at least 10k+5k jobs from the medium level companies who are forced to follow suit and the small companies who spring up at the location to cater to the outsourced small jobs from the biggies. I am not considering the 25K future strength at all, just the basic and the “follower effect” only. These 35k well paid jobs are enough to change an area altogether. How ?

2)      These 35k people would have bought about 10-13k flats in the location, another 10k flats to be rented. Just the rental income would need investment, and would require a hell lot of people including promoters, suppliers (and our syndicates), architects, Engineers, artisans, security, transport, electricians,  plumbers, grille-makers, carpenters, marble sellers and artisans etc. In a detailed calculation I won’t bore you with, my rough calculation has given a an equivalent permanent job-load of about a 3k people for 20k flats, with further recurring jobs of 500 permanent people for security and maintenance related loads.

3)      The office spaces and the related infrastructure would need another 2k + 500 permanent people

4)      Related business of real estate brokers, AC and electronics dealers, pump-generator dealers etc. would give another equivalent permanent job load of 1K

5)      Domestic help, drivers (beside the office support staff or rented cars) requirement would be about 12k (considering same maid can work in upto 4 homes) beside special purpose full-time maid or ayah – 1k

6)      Support staff and outsourced job requirements for the companies 2k

7)      Food sellers to cater to this crowd and restaurant (marginal additions) – 1k

8)      Car dealers and additional small garages to handle the additional sale of 20k cars (and bikes) and their maintenance – 1k

9)      Markets needed to cater to the 35k high paid workers as well as the M2 addition of 30k other people will be at least 8-10 markets and their suppliers – 4k

10)  Shopping mall and entertainment centers to cater to this crowd would be 2-3, converting to 500 jobs + 500 equivalent for the creation of the facilities, total 1k

11)  FI/LIC/Bank related people marginal addition for M1/M2 income – 1k

12)  Schools and other related facilities – 1k

13)  Hotels/resort/travel agents and facilities in the extended areas – 500

14)  Infrastructural Government spending and related government recruitment against revenue to cater to this M1+M2+M3 level of 70k-100k people (with families)  - 1k

15)  Food supply and farming related marginal addition needed – 1k

16)  Miscellaneous – 3-5k(includes Taxi/Uber/Ola usage etc. and different miscel. facilities

77) Medical facilities, Doctors, Nurse, Paramedics, Nursing home staffs etc. - 500-1k

17)  TOTAL (in a ball-park calculation) – 75-90k jobs of all different levels, would tend to 100k if Infosys really ramped up towards 25k in a few years

Considering the huge population already busy in serving the needs of the IT sector people presently placed mainly in Sector 5 and Newtown, a total of nearly 1.5 lacs, we have to consider that nearly 22% straight addition to that would have generated a significant addition to the M2+M3 kind of jobs in the market to support the requirements of these 35K well-paid people. 

In a nutshell, one stupid and completely dogmatic illogical decision has effectively made more damage than even the Singur sham, and cost us nearly a lakh jobs, putting a lakh people in the darkness. I just feel like crying, cry my beloved state. You are in dirty bloody hands !!