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          NEW DELHI: It is the end of the road for the fabled rickshaw pullers of Calcutta. The decision to ban them is the latest reform to bear the signature of Buddhadeb Bhattacharjee, the Deng Xiaoping-quoting communist who became West Bengal's chief minister in 2001 and has turned the eastern Indian state into a laboratory for a highstakes marriage of Marxist theory with market reality.
The first capital of the British Raj, with its slums and its floods, is still a far cry from Shanghai. But under the rule of this highly pragmatic politician, known as Buddha, from the Communist Party of India (Marxist), Calcutta increasingly aspires to be seen as a little piece of China in India, a place where money has no ideology and foreign investment is welcome. What Beijing thinks today, the saying goes, Buddha thinks tomorrow.
For India-watchers, what happens in Buddha's Bengal is of more than academic interest. The speed limit for economic reform in India is to a great degree set in Calcutta, home to the so-called Left Bloc of Communist parties whose support is crucial to the government's majority in parliament. Mr Bhattacharjee's ability to persuade his more ideologically fixated comrades of the need for modernisation in the left's heartland is the sine qua non of reform in India as a whole.
"People carrying other people is barbaric," Mr Bhattacharjee says in an interview with the Financial Times. "The sight of a human pulling other humans on his shoulders for a pittance also does not enhance Calcutta's image in the eyes of influential visitors. Phase by phase, we will not renew their licences."
For the Communists who have ruled the state since 1977, the rickety contraptions are more than just embarrassing relics of colonial subjugation that other Indian cities abolished long ago. By highlighting Calcutta's infrastructural shortcomings, the slow-moving sedan chairs undermine the party's urgent pursuit of foreign capital. "Buddhadeb deliberately announced he was abolishing hand-pulled rickshaws just before he went to Singapore to promote foreign investment," says Sabir Ahamed, programme co-ordinator of the Calcutta Samaritans charity.
The new Calcutta that Mr Bhattacharjee is building, with its information technology parks and special economic zones, has little to offer these unskilled charioteers. But the 61-year-old chief minister is unlikely to heed their protests. He is equally firm with hardliners within the Left Bloc who claim he has sold out to global capital. "I want investment," he says. "Money has no colour or nationality."
There are limits to how far Mr Bhattacharjee can go, however, without losing the support of his party. Over the past 18 months, the Left Bloc in New Delhi, conscious that the government's survival hinges on its record tally of 61 seats in the May 2004 election, has exercised a virtual veto over economic reform. Manmohan Singh, India's prime minister, who criticises their "schizophrenia" in opposing reforms in New Delhi that they champion in states they rule, does his best to support Mr Bhattacharjee.
When Azim Premji, founder of software group Wipro, recently hailed the Bengali politician as "the nation's best chief minister" -- an extraordinary endorsement for a Marxist politician from the country's wealthiest entrepreneur -- Mr Singh publicly agreed. India, the prime minister added, needed more such "visionary and courageous political leaders who understand the challenges of modernisation".
Mr Bhattacharjee, who lives with his wife and daughter in a one-bedroom apartment, is also conspicuously incorruptible, a rare attribute in a country ranked towards the bottom of most global corruption indices. Harsh Neotia, a Calcutta property developer, says: "Very rarely do you find corruption in the party. Even his worst enemy would admit that the chief minister has the best interests of the state at heart."
The rebirth of West Bengal, now the third-largest economy in the country, began under Mr Bhattacharjee's predecessor, Jyoti Basu, whose reign was already under way by the time Deng Xiaoping started his market-oriented reforms of the Chinese economy in 1978. For Mr Basu, the priority was no longer a socialist utopia but to steer the party and the state government towards reform and growth.
Mr Basu restored stability to a state wracked by a Maoist insurgency and made land reform a reality for millions. But belligerent unions, which specialised in lock-outs and in encircling terrified managers, pushed the state into deep and prolonged industrial decline. West Bengal's share of Indian industrial output fell from around 10 per cent in 1980 to less than 5.0 per cent by the mid-1990s.
As businesses and capital fled the state, Mr Basu made his first significant break with conventional communist strategy. In 1994, as the economic reforms that had started in New Delhi three years earlier started to bear fruit in other states, Mr Basu proclaimed Bengal's first industrial policy, welcoming foreign investment "as may be appropriate, or mutually advantageous".
The process accelerated under Mr Bhattacharjee, notably with the 2002 decision to declare information technology an essential public service. This aimed to protect it from strikes and to guarantee the continuity of service demanded by call-centre operators. By and large, it succeeded, Last month, however, a national strike called by the joint action committee of trades unions, with the CPI (M) union leading the way, for the first time disrupted Calcutta's IT industry.
His party comrades, some of whom obstructed workers going to call centres, hailed the chaos, but Mr Bhattacharjee was furious. "The strike was called by central trades unions, not me," he says. "They do not understand IT -- it's not like a jute mill. It's 24/7 and should be totally out of bounds for strikes. I am trying to repair this wrong message. I am going to assure the big IT companies -- IBM, Wipro, Cognizant, PwC and so on -- that next time there will be total peace."
Mr Bhattacharjee, who generally decries the lack of political freedom in China and questions the sustainability of reforms enacted without debate, cracked down hard. According to India Today, he reportedly told IT companies to give him the names of the people who had obstructed their cars so he could have them arrested. The message was clear: the flow of investment into Bengal's IT industry should at all costs be maintained. "The government will do what it takes to get you to the state," he says.
For a state whose rulers for years rejected computers as "job-killing devices", West Bengal's recent ability to attract IT investment is a startling turnaround. Capitalising on its high-quality graduates and bottlenecks in Bangalore, India's best-known hightech success story, Calcutta's IT sector is growing at 70 per cent a year -- twice the national rate -- albeit from a low base. In the next two years 13m sq ft will become available for rent to IT companies such as Infosys, which has just committed to investing Rs5.0bn ($111m) in a campus for 10,000 developers.
One company typical of the new Bengal is Xenitis, a manufacturer of computer components and owner of the Aamar PC (My PC) brand of personal computer. Founded in 2002, the company is now selling 25,000 of its own entry-level branded PCs -- some priced at less than Rs10,000 -- a month and claims a 7.0-8.0 per cent national market share. Its sales this year will reach Rs6.0bn from Rs1.78bn last year.
"The same people who rejected computerisation in the 1980s have changed," says Shantanu Ghosh, Xenitis's 35-year-old founder. "They realise it is a part of life and must be accepted. The government is now sensitive to the needs of manufacturers, from identifying land to securing power."
Mr Bhattacharjee has set Bengal a target of ranking among India's top three IT states by 2010 and of contributing 15-20 per cent of the country's total IT revenues, compared with 5.0 per cent in 2004. India as a whole aspires to increase revenues in the IT sector from $16bn in 2004 to $80bn by 2008, including $50bn of exports.
"We started late in IT and, to our horror, discovered huge misperceptions about Bengal linked to the Naxalite [Maoist] movement, traffic jams, Mother Teresa, the slums and so on, but over the last four to five years there's been a sea-change," says G.D. Gautama, IT secretary of the West Bengal government. "Almost all big companies are now here and those that are not are thinking about it."
Bengal has been growing faster than states that have traditionally attracted most foreign direct investment in India. State domestic product expanded at an annual rate of 7.1 per cent between 1994 and 2003, compared with 6.4 per cent in Karnataka, 6.1 per cent in Gujarat, 5.2 per cent in Tamil Nadu, 5.1 per cent in Andhra Pradesh and 4.8 per Keuters cent in Maharashtra, according to Planning Commission data.
"Our overall perception is that Calcutta has recognised the importance of creating an environment suitable for private-sector investment," says Priya Basu, the World Bank's lead private-sector specialist in India. "The leadership is saying the right things -- in terms of improving infrastructure, making land available and bringing in foreign investment -- and gradually doing the right things too."
Mr Bhattacharjee's determination to accelerate economic reform has, of course, exposed a substantial difference between what communists say for effect in New Delhi and what they are prepared to do when they come to power. Mr Bhattacharjee has pushed ahead with reforms that his comrades still oppose at national level.
Tensions within the Left Bloc have been aggravated by Mr Bhattacharjee's latest plan to bring in foreign capital. Indonesia's Salim conglomerate is poised to sign a deal to convert around 5,100 acres of mostly agricultural land near Calcutta into a special economic zone containing an IT hub and what it describes as a "health city". It will also manufacture motorbikes in Howrah district, across the river from Calcutta.
The Salim deal is just the latest in a series. Last year, Bengal signed a $235m contract with P&O, the British ports and shipping group, which will build India's first private port just a few miles from Calcutta. Mr Bhattacharjee has also not flinched from restructuring 56 loss-making state-run manufacturing units.
"What the chief minister does is politically significant because it enables reformers, including the PM, to demonstrate that the left is not unified in opposing the reform agenda," says Mark Runacres, deputy UK high commissioner in India. "But a much more powerful message is that major international players are committing to West Bengal because it means business, provides infrastructure and has integrity at the top."
So far, however, attempts by Mr Singh to divide and rule have failed. The government recently capitulated to the left by finally shelving the sale of a 10 per cent stake in Bhel, a state-owned electrical equipment group, providing further evidence that privatisation has been all but abandoned, labour market reforms watered down and inefficient sectors such as retail and banking protected from foreign investment.
"I am a proud communist," Mr Bhattacharjee says. "I believe in Marx's world outlook, in the fundamental contradiction between labour and capital and in the class struggle. I know Americans will not write the last chapter of human civilisation but I am also a realist. The world is changing. The lesson from the collapse of the Soviet Union and from China is that we reform, perform or perish."