MAMATA FORGETS INDUSTRIAL PROMISES, FUNDS VOTE-BANK SCHEMES

The Bengal government cancelled 30 years of signed commitments retrospectively.

- SUPROTIM MUKHERJEE

In a move that has stunned industrial circles and triggered a wave of litigation, the Mamata Banerjee-led West Bengal government has scrapped all industrial incentives promised over the past three decades, redirecting the resources to welfare schemes in the runup to the 2026 Assembly elections.

Business leaders call this the "biggest betrayal of investor trust" in Bengal since liberalisation, warning that the decision will irreparably damage the state's already fragile investment climate.

The new law, passed quietly in March 2025 as the Revocation of the West Bengal Incentive Schemes and Obligations in the Nature of Grants & Incentives Act, 2025, cancels every industrial support scheme announced since 1993. It also permits the state to recover "excess disbursements" from companieseffectively clawing back subsidies already granted.

The Banerjee government insists the move is a fiscal necessity. "We have to choose whether subsidies should go to the poor or the rich," the Chief Minister declared in the Assembly. But industry insiders say the decision is nothing less than an assault on legal commitments, contract sanctity, and Bengal's reputation as an investment destination.

The retrospective design of the Act has sparked particular outrage. Schemes dating back to Jyoti Basu’s 1993 Industrial Policy, Buddhadeb Bhattacharjee’s drive for industry in the early 2000s, and Mamata’s own post-2011 incentive plans have all been voided with one stroke.

This means that companies which invested hundreds or even thousands of crores on the strength of formal incentive agreements have, overnight, been denied what they were contractually entitled to. Unlike other policy reversals elsewhere in India, no transition clause, grandfathering provision, or stakeholder consultation was undertaken in Bengal.