A comparative study of the socio-economic development experience of West Bengal from the year 1980 to 2020

Abstract

West Bengal is the fourteen largest state in India by area, located in the east along the Bay of Bengal, however its capital, Kolkata is the third largest city of India and the state itself has the fourth largest population. This highlights the significance this state commands in the socio-economic and political spheres of the country. After independence, West Bengal was considered the hub of commerce and trade, with one of the highest GDPs in the country, however, it no longer has the kind of economic status it used to have in pre-1970s era. When comparing social and development factors too, West Bengal was way ahead of its time, but other states have fast improved themselves leaving West Bengal way behind in the overall development index. Most often, its early stages of relative decline during the Left Front’s rule for 34 years (1977- 2011) is attributed to low aggregate productivity, poorly functioning labour markets and misallocations in priorities set to different sectors. After economic liberalisation in 1991, while other states were able to attract investments, West Bengal couldn’t retain the industrial growth that other states offered due to higher productivity. However, it is interesting to look at how West Bengal’s state has changed, if at all, after a new political party, Trinamool Congress came to power in 2011. West Bengal’s contribution has halved from 11.6% to 5.9% in the period 1950-2017, and its rank subsequently slipped from second to sixth, in economic size. The state hasn’t been able to see a growth story which it was capable of and expected to after the economic reforms of India. States which were slower than West Bengal pre-1980, have progressed much better. The more educated have slowly migrated away from West Bengal to other states for better prospects and businesses are still reluctant to consider Bengal as a top priority for investment. In this study, we assess how far is this reality from mere perception. In this report, we aim to study the socio-economic development experience of West Bengal from the year 1980 to 2020 relative to its comparable states in terms of economic development prosperity and population such as Maharashtra, Tamil Nadu, Gujarat, Karnataka, and Uttar Pradesh. We first start by analysing the demographic indicators such as population, its growth and density, followed by social indicators such as sex ratio, literacy rate and poverty rate. In the next section, we provide a detailed examination of economic factors such as state GDP and its growth, followed by sector wise break down and their individual performance. We further look at other important variables such as unemployment, labour force participation, inflation, investments, gross fixed capital formation ratio, power availability, credit availability, ease of doing business rankings, fiscal deficits, tax collections and capital expenditures. Next, we look at health and education aspects, we are an integral part of any nation’s overall development. Health indicators such as life expectancy, mortality rate and availability of medical practitioners is studied followed by educational indicatorssuch as student-teacher ratio, enrolment rate, number of schools and colleges relative to population. In the end, we present three key policy recommendations for the West Bengal state government as a way forward to improve its socio-economic performance.