Profile – Dr Amit Mitra on leading the ‘Bengali Renaissance’
West Bengal’s Finance Minister, and chair of India’s empowered GST committee Dr. Amit Mitra, talks to the UK India Business Council about his career, current role, and the GST Bill itself
For 5 years now, Dr. Amit Mitra has been at the forefront of Indian politics.
In his current role as the Finance Minister for the Eastern state of West Bengal, and Chair of India’s GST committee he is carving out a strong image for himself in domestic politics. Yet it is easy to forget the wealth of experience he holds on an international level too. He has received honours recognising his work in several countries, including Italy and Japan – where he was awarded the prestigious ‘Order of the Rising Sun’ in 2005 for his contribution to improving Indo-Japanese relations.
He is well-versed in the art of international negotiation, having overseen the technology transfer in defence with the US on behalf of India, and he talks of his immense privilege of being an advisor to the Minister for Industry and Commerce at the World Trade Organisation summit, as part of his role at the Federation of Indian Chambers of Commerce and Industry (FICCI) – which he also chaired.
Dr. Mitra talks of these years fondly, and there is a sense that he holds immense pride at having spoken for India on the international stage. “This was a life that was policy based, international relations based, and based on looking at India and reaching out,” he explains.
His period at FICCI was marked with improvements across the board as the number of conferences organised by FICCI rose from 10 to 500 between 1994 and 2011 and its revenues saw an increase from Rs 3 crore to Rs 110 crore under Dr. Mitra’s stewardship.
As someone who has a track-record of service to both the public and private sector, he is keen to point out that while at FICCI, he ensured that the national interest always came first. “There were times when what we perceived as policy interest for the country may not be consistent with a business group. That’s when you have to convince them, you have to be on the ball,” he says.
Back to Bengal
Many eyebrows were raised when Dr. Mitra left FICCI after a hugely successful stint, to move into politics as a Member of the Assembly for Khardaha – a seat he won from the sitting Finance Minister, Asim Dasgupta by a margin of 26,154 votes. Soon after his election, he was appointed Finance Minister for West Bengal by Chief Minister Mamata Banerjee – who he had worked with previously at the transport ministry. On his decision to leave FICCI and go back to Bengal to enter politics Dr Mitra is unequivocal about his motives.
“My families’ legacy was about working for society – fighting for independence. There’s a station in my mother’s name because of her contribution to national freedom fighting. This is a backdrop to the fact that I felt persuaded that Bengal could go back to its great period of renaissance. As someone who is not a Bengali – Gopal Gokhale, once said, ‘what Bengal says today, India thinks tomorrow.’”
The Bengali Renaissance he speaks of is an idea rooted in history. The State is proud to have produced all four of India’s Nobel Prize winners, and has a record of political, cultural and religious reformism. This, combined with Dr Mitra’s view that Mamata Banerjee would win in West Bengal in 2011, influenced his decision to come back and play a central role in reviving the State after 34 years of decline during communist rule.
The changes Dr. Mitra has overseen as Finance Minister, under the watchful and supportive eye of Mamata Banerjee are plain for all to see. The State’s GDP has more than doubled, from Rs 4,60,959 crores to Rs 9,39,471, and the fiscal deficit has also been halved to 2.65%. Crucially though, the tax take has doubled from Rs. 21,129 crores to Rs. 42,920 – boosting the state’s coffers significantly.
This considerable rise in tax receipts is attributed by Dr. Mitra to his team’s decision to introduce e-taxation across the state. “The Asian Development Bank in 2005 had said, that there was a rate of 40-50% for non-compliance in West Bengal. With e-taxation there was immediate compliance – because there was no hassle,” he said.
This increase in revenue from taxation is also linked to the state’s rising GDP and a steady increase in the amount of investment flowing into West Bengal. Dr. Mitra points to the example of Tata in the region – “take Tata Metaliks, it was almost closing when we came to office. Today they are employing 1500 people. They are making profits. Tata Hitachi was floundering when we came to office. Today, not only is it doing well, but it has three Japanese subsidiaries in our own industrial park in Kharagpur. TCS are opening a new campus in Rajarhat, when at capacity the Tatas will employ 60,000 people in our State.”
On this evidence, Mamata Banerjee’s dispute with in 2008 with the previous government over the Tata Nano Singur controversy seems to have been confined to history. The recent Supreme Court ruling in favour of the position Banerjee took vindicates her stand against the communists, with leading barrister Justice Gowda calling the actions of the State Government of the day “grossly perverse” and “illegal” – prompting Banerjee to declare that she can now “die in peace.”
With Tata investment at record levels in West Bengal, and providing employment for thousands of Bengalis, it is clear that Mitra’s assertion that there is “no issue” between the company and the state government is indeed true.
GST, and the challenges for the future
Finance Minister Arun Jaitley appointed Mitra as chair of the empowered Finance Ministers’ committee on the long-awaited Goods and Services Tax (GST). They handed him a key role in establishing the States’ position and liaising with the Central Government on what is perhaps the most important economic reform in decades. Dr. Mitra sees GST as a reform that must be bottom-up, and not imposed on states’ by central government. In this regard he says, the wording of the Bill is key.
“I fought very hard on the wording of the Bill. The [previous] wording was ‘States will be compensated for a loss of revenue, up to a period of five years.’ I worked very hard to get this wording changed to ‘for five years.’ Before this, any time in the five years it could be stopped. This is the reason why it previously couldn’t be passed – because states were worried.”
Consensus is the name of the game for GST, and Mitra is determined to try and meet the deadline of April 2017 – although he says this will not be easy. “40,000 pieces of paper have come to our committee [asking for exemptions] … This is the world’s largest reform in the fiscal space – we will have to see how the chips fall in terms of timing.” Recent disputes have meant that meeting this deadline looks unlikely, but West Bengal’s Finance Minister will still look to play a pivotal role.
Dr. Mitra’s family history of freedom fighting and public service is poignant when considering the challenges he currently faces. One thing is clear – if he sees through the passage of the GST to completion, and succeeds with the ‘Bengali Renaissance’ he talks of, he will be well on the way to carrying on this legacy.