The Hindu : Gujarat's industrial climate takes a beating

Online edition of India's National Newspaper
Wednesday, Mar 06, 2002

National

National

Gujarat's industrial climate takes a beating

By Manas Dasgupta

GANDHINAGAR March 5. The worst may be over and normality is slowly returning to most parts of riot-torn Gujarat. But the scars left behind in the four days of mayhem may take a long time to heal.

Besides the losses to the trade and industry, both in production and damage to property that is yet to be estimated officially, the State may also fail to attract investments. Its biggest asset, the peaceful industrial climate that attracted investments despite the high cost of power and acute shortage of water, is now at stake.

The deep communal divide that is increasing, commensurate with the growing influence of the Vishwa Hindu Parishad, has rendered investments unsafe. This at a time when the State was coming out of the earthquake disaster and the investors were thinking of returning, particularly to Kutch where the Government has offered a five-year tax holiday.

The chambers of commerce and industry have estimated the damage to the shops, factories and other business establishments in the looting and arson at over Rs. 1,000 crores. Besides, the State has suffered a production loss of about Rs. 500 crores a day. The countryside is also affected this time and with reports of standing crops being burnt or damaged pouring in, the loss to the agriculture sector could be substantial.

The industrial climate, however, may start looking up again after the initial shock, provided the situation stays calm. This, however, seems unlikely. Intelligence reports indicate the possibility of a minority backlash. It may not happen locally, but the "outside elements'' may try to take advantage of the sufferings of the minorities during the mindless violence and whip up communal passion against the majority community.

If, as the Union Home Minister, L. K. Advani, suspects, the Inter Services Intelligence (ISI) of Pakistan was involved in the Godhra carnage, it is likely to be only a part of a bigger game plan to create instability and terrorism in this border State. The VHP, by giving the bandh call that provided the ground for minority-bashing, and the ruling BJP, by extending its support that further confused the police, may have played into the hands of these elements.

The increasing instances of recovery of RDX and arms and ammunition during the last 18 months or so, believed to be only a small part of the huge quantity of arsenals being pumped into the State, have led the Intelligence department to believe that the ISI is expanding its base in Gujarat. The scars of the communal riots will make it easier for the ISI to recruit volunteers.

While a disturbed atmosphere will hurt the State's economic interests, politically it will suit the ruling BJP. The Godhra episode has once again swelled the vote bank of the BJP. The party had lost the panchayat and municipal corporation elections, four of the five Assembly and Parliamentary by-elections and also suffered an erosion in its base in the panchayat elections in the last few months.

The immediate gain of the Godhra episode for the BJP is expected to be in the elections to 88 municipalities if the polling is held as scheduled on March 31. With the urban populace once again clearly divided on communal lines, a large number of municipalities may return to the BJP kitty. But it is doubtful if the sentiments will remain alive till the Assembly elections due in February next year. But a possible minority backlash will help the ruling party to keep alive the communal flare and take advantage of it in the Assembly elections.

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