Calcutta, May 29: Imports through Calcutta airport shrank by 17.5 per cent in the last fiscal, suggesting a slump in industrial activity in Bengal despite Mamata Banerjee’s claim that the state’s growth rate is higher than the national average.
This is the deepest decline in a decade despite a rise in imports in the last quarter of 2012-13 thanks to a demand for set-top boxes ahead of a February deadline for digitisation of Calcutta’s television network.
Figures from the Airports Authority of India and the aviation industry show how the announcement and establishment of the Nano factory had led to a 41 per cent rise in imports in 2007-08. Its pullout was followed by dips of 9.5 and 8.2 per cent in consecutive years. (See chart)
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A drop in import volume indicates a reduction in industrial activity in a less developed region like Bengal, whose import basket has traditionally had a sizeable component of equipment and machinery, an expert said.
While exports out of Calcutta airport have witnessed a growth of 2 per cent, the export basket — dominated by tea, leather goods, clothes, vegetables, flowers and fruits — hardly includes any industrial product.
“Industrial activity in a less developed region like Bengal will always require import of machinery and equipment, needed to set up plants,” said a city-based economist who did not wish to be named.
“Besides, high-end manufacturing industry too needs inputs sourced through imports. If the import volume is negative, it’s clear that the industrial sector is not growing.”
This interpretation of the import dip at the airport contrasts with what Mamata claimed while celebrating her government’s completion of two years.
According to the state government, the industrial sector in Bengal grew by 6.24 per cent in 2012-13 compared with the national average of 3.12 per cent. The government’s claim of success has apparently failed to arouse the interest of international airlines that deal in cargo.
Etihad, which stopped its freighter service to the city last August, and Emirates, which withdrew its weekly cargo service last year, have no immediate plans to resume their Calcutta operations, airport sources said.
Airport, airline and import agency sources told The Telegraph that Calcutta was sustaining its import volume on project-based equipment like telecom apparatus, citing the late spurt in 2012-13 thanks to a demand for set-top boxes.
“The rise in imports in 2010-11 too owed mainly to a demand for telecommunications equipment powered by a boom in direct-to-home satellite television connections in Calcutta,” said an official of a US-based import agency that handles cargo in the city.
“Once the demands of the DTH market slowed down, the imports dipped again,” he added.
The overall demand has fallen because there is no industry in Bengal capable of bringing in huge imports for production, said an official of an airline that handles cargo imports and exports between Calcutta and Europe as well as parts of Asia.
“Things would have been different had the Tata Motors plant in Singur not shut down,” he said.
Airlines sources said the increase in imports before the Nano pullout happened mainly because steel sheets and automobile spare parts were brought in for the Nano plant.
The official of the US-based import agency said a significant part of current imports of machinery and automobile components through Calcutta airport were not meant for industries in Bengal. “They are for various Tata companies in Jamshedpur,” he said.
Apart from equipment and machinery, Calcutta’s import basket is made up mainly by cellphones, computer accessories, chemicals and spare parts for heavy earth-moving equipment like tractors and cranes used in mining.
While volumes in Calcutta have shrunk, other metros present a different picture.
For instance, Finnish handset-maker Nokia set up a plant in Sriperumbudur near Chennai in 2006 and subsequently invested over Rs 1,800 crore, which changed the region’s business climate. Over 9,000 people got jobs with the company and trade activity through Chennai airport received a boost, generating positive spin-offs.
“Singapore Airlines and Emirates added extra cargo aircraft to their Chennai services to import spare parts from Hong Kong and China and to export the finished handsets to Europe and other parts of the world,” said an aviation industry source.
Airports Authority of India chairman V.P. Agrawal said: “We have a new cargo-handling facility in Calcutta but only 15 to 20 per cent of the capacity is now used.”
Agrawal added that airlines would be given “concessions on landing charges” in Calcutta to encourage cargo-handling. He did not explain how that would help if demand did not rise.
Source:-http://www.telegraphindia.com
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