West Bengal may be eager to have a financial hub, so much so that chief minister Mamata Banerjee laid the foundation stone of the hub at Rajarhat for the second time on Saturday (after Union finance minister Pranab Mukherjee had laid a foundation stone in October 2010), but ironically, part of the land allotted to one of the anchor investors, the Calcutta Stock Exchange (CSE), has already been encroached upon.
CSE chairman Sunil Mitra told FE that the exchange has two plots ? one of 3.5 acres and another five acres ? for the hub at Rajarhat, envisioned on the lines of the Bandra-Kurla complex in Mumbai. Mitra said the 3.5 acre plot has been encroached upon and the exchange has sought government assistance to clear it.
The five-acre plot was bought as early as 1998-1999 for R25 crore and the 3.5 acre even before that. But later the plots came under the proposed financial hub and CSE was asked to be part of it. ?We want to have a contiguous stretch of 8.5 acres and have approached HIDCO, the agency developing the project, for it. But there has been no final decision on it, though we are considered a part of the financial hub,? Mitra said, adding that CSE has been asked to take 3.5 acres, a plot appended to the five acres, via a bidding route.
?Once we have the entire contiguous 8.5 acres, our board will decide as to how to integrate ourselves with the financial hub,? Mitra said.
CSE, currently functioning as trading platform of NSE and BSE, would need to come up as an independent stock exchange, on whose strength the financial
hub would attract investment, a finance department official said.
Sanjay Budhia, a director in the CSE, said the exchange has already gone into a marketing drive to enlist more eastern India companies within the CSE fold. ?CSE would be a reflection of the vibrancy of eastern India?s economy and only a vibrant economy can drive a financial hub,? he said.
Officials of the finance department, the nodal agency of the project, felt it would be a challenge to rope in a number of banking and non-banking financial institutions, as well as financial services firms, since eastern India?s economy was ?not as mature? as western India.
The other investors in the hub are State Bank of India, UCO Bank, United Bank of India, UTI Mutual Fund and Industrial Financial Corporation of India.
Although Firad Hakim, state urban development minister, claimed that the hub has been a concept of Mamata Banerjee?s government, the former Left Front government initiated the project and Union finance minister Pranab Mukherjee laid its foundation stone in October 2010.
Terming the project Global Eye, Banerjee said at the event, ?This project will attract huge investment and has the potential to generate 20,0000 jobs. It will be an iconic project like WalMart and London Eye.?
The first phase coming up on 25 acres, of the 300 acres identified by the previous government, would seek to attract at least R12,000 crore investment. But this would require foreign financial institutions to join the hub.
A finance department official said the state would tap the UK financial sector, since there were already promises from the UK government to help in making the project a success.
But much of the project?s success would depend on CSE, which is yet to formulate its plan on the modus operandi within the hub. Typically, a financial hub needs to house a stock exchange and the entire activity revolves around it.
The Mamata government has been grappling with land issues and has not yet come out with a clear land policy. Her announcement when she took over as CM that industry shouldn?t depend on government for land has led to big-ticket investment staying away from Bengal.