Economy of West Bengal

Topics: Economics, States and territories of India, Bengal Pages: 43 (15196 words) Published: February 10, 2013
Special article

the economy of West Bengal
Ratan Khasnabis

Even after 30 years of Left Front rule in West Bengal, the state has lagged behind in a few economic indicators, this, despite better performance in agriculture. Agricultural growth rates have however declined in the last decade or so, the reasons for which have been elaborated upon. A gradual movement towards unorganised labour has characterised working patterns in the state and the phenomenon is studied, along with the conditions of living. In this context, the new economic policy of the Left Front government is critiqued. It is suggested that a policy that favours inclusive growth with greater emphasis on small enterprises should be followed by the government if it wants to sustain the gains made and address the shortcomings in the state.


An earlier version of this paper was presented in the seminar “India Rising”, held in Turin University, Italy (8­10 November 2007). Thanks are due to the participants of the seminar for helpful comments on the earlier draft. I am grateful to Abira Roy for able research assistance. The usual disclaimers apply. Ratan Khasnabis ( is with the Department of Business Management, University of Calcutta. Economic & Political Weekly EPW

n West Bengal, a coalition of the leftist political parties known as the Left Front (LF) rules the state since 1977. This is unprecedented in the political history of India. In no other province, such a phenomenon has prevailed. The coalition has faced seven general elections based on universal adult suffrage and in each election, it has won with thumping majority. In the assembly, today the LF has the support of 234 elected represent­ atives in a house of 294 members. Political stability notwithstanding, the state has not performed well in the economic front during the last 30 years. This is reflected in almost every measure of the economic prosperity. In terms of per capita state domestic product (SDP), West Bengal had been the richest state in India in 1960. By the end of the last millennium, the SDP (per capita) rank of the state declined to 9. In 1947, the share of the state in the total industrial production of the country had been 24%. By the time the LF came to power, it had already reduced to 11.9%. Next 30 years registered a further decline and the state which was known as the most industrial­ ised state of India, contributes now only 4.6% in the industrial output of India. It is true that West Bengal performed well in agri­ culture during the left regime. But then, the agricultural growth rate is also declining now in the state. Moreover, the productivity of West Bengal agriculture is rather low. The productivity of prin­ cipal crop (rice) in West Bengal is much lower than that in Punjab or Andhra Pradesh. In terms of other indicators of prosperity as well, the situation in West Bengal is not promising. The Human Development Index (HDI) score of the state is 0.305, which places the state in the 10th position among 17 major states of India. In rural West Bengal, only 32% of the households have access to electricity (rank 13). In terms of access to safe drinking water, the scenario is somewhat better1, the literacy rate is also somewhat good.2 But then the mean years of schooling in West Bengal is only 4.4 years which places it just above Bihar which ranks last in this regard, among the major states of India. One may add that mean years of school­ ing in the state is low because the school dropout rate at primary level is phenomenally high in West Bengal.3 The rural inequality in West Bengal is low (rank 5); but then, the spending power per capita is also low in the state. Rural Punjab or rural Kerala is much more prosperous than rural West Bengal. It is quite evident that in terms of various indicators of well­ being, the LF­ruled West Bengal failed to perform well. Why is it that the anti­incumbency factor could not play a significant role in the West...
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