The Telegraph
Since 1st March, 1999
Email This Page
- Answering the critics of Bengal’s economic performance

The simultaneous appearance of two news items in The Telegraph (August 19) symbolizes a debate that is baffling the state of West Bengal. The first of these is euphoric in its announcement that the overhead light rail transit project for Calcutta is close to implementation. The second reports that Singur is fuming at the government’s love affair with the Tatas, and reiterates apprehensions expressed in certain quarters that conspiracies are afoot to transform a bucolic paradise into an industrial wasteland.

The root of the controversy lies in a trillion-dollar question: “Quo vadis West Bengal'” Answers to such questions are fraught with complications, particularly so since traumatic experiences are unavoidable for some sections of the population when society undergoes large-scale change. They remind us of dialogues surrounding issues of transition from feudalism to capitalism, though admittedly, feudalism is not exactly the expression that applies to rural West Bengal after three decades of Marxist rule.

The economic uplift of a nation has rarely been a story of uncontaminated bliss for everybody. Any major transformation involves unpleasant disruptions in accustomed lifestyles (the fate of Doctor Zhivago’s piano being a case in point), as well as in traditional means of livelihood of temporarily inconvenienced people (brought out vividly in Dickens’s portrayal of the incipient industrial society in England). On the other hand, these instances of human distress have never been excuses for clutching on to policies of changelessness in isolated islands of economic inconsequence. For it is not too evident either that stagnation helps to reduce the intensity of human suffering.

Granting, therefore, the fact that economic bounties may not visit each and every individual inhabiting a society, there is important sense in investigating the average man’s condition in a developing economy. Especially so in a democratic society, where movements in per-capita outputs are not as inane indices of government performance as some might wish to make them appear. Severe inequality of income distribution, even if accompanied by smart movements of per-capita earnings, normally leads to a government’s demise at the polling booths.

Given the West Bengal government’s commendable survival record therefore, wisdom dictates a scrutiny of the economy’s average performance under left rule vis-à-vis the rest of the country. Fortunately enough, the Reserve Bank of India obliges the curious with relevant figures in this context.

Quite clearly, the per-capita net state domestic product of West Bengal falls short at the moment of the more successful of the Indian states. In the year 2002-03, West Bengal’s (inflation-adjusted) per-capita net SDP was Rs 10,952, while that of Gujarat stood at Rs 14,539, of Haryana at Rs 14,694, of Karnataka at Rs 11,799, of Maharashtra at 15,466 and of Punjab at Rs 15,264. And these were only some of the states that were ahead of us.

In terms of rates of growth of the same index, however, the picture appears to be drastically different. To appreciate the extent of the divergence, it is helpful to divide up our study into three overlapping periods, 1980-81 through 2002-03, 1990-91 through 2002-03 and finally 1993-94 through 2002-03. The first of these begins with a year when market friendliness was a figment of the imagination, the second when a sensitive ear or two had detected the hesitating initial strains of our efforts at economic liberalization, and the final stretch pertains to a period when the first movement of the symphony of reform had already been played out. The unfolding story is best captured in terms of a table of numbers that elementary manipulations of the RBI data yield (see above).

In the first and the longest of the chosen periods, the per-capita growth rate of West Bengal was marginally above the national average, but fell short as far as its per-capita performance in manufacture and services growth was concerned. Moreover, the two chosen states of Karnataka and Maharashtra outperformed West Bengal, in terms of the per-capita growth rates of net SDP, of manufacture and of services. In agriculture, of course, West Bengal stood above the others.

The second of our phases represents significant changes. We had overtaken the national average quite notably in all fronts except manufacture, where the deficit was marginal at best. More interestingly, West Bengal dominated Maharashtra on all four counts and Karnataka in manufacture and services. And then in the final phase, our position relative to the country as a whole and to Maharashtra remained unaltered. With respect to Karnataka also, we moved ahead except for agriculture.

As far as agriculture goes, there is a general decline in growth rates all around and West Bengal is no exception. We have pretty much squeezed out the last extra droplet it can yield. Yet, curiously enough, the agriculture-versus-industry debate caught public attention long after agricultural decline started in this state. What is even more striking is that manufacture as well as services began their upward trend well before disputes relating to agricultural land acquisition commenced in the state. The latter observation suggests the oft-ignored fact that we owe our success in these areas not merely to the policies being pursued by the present government. The incumbents are, in reality, pushing forward strategies formulated by those immediately preceding them.

The critics of the performance of the West Bengal economy, residing both inside as well as outside the state, would probably be surprised to note that in the third of our selected periods, Maharashtra sustained a negative per-capita growth of not only agriculture, but also of manufacture, whereas West Bengal was able to maintain status quo in manufacture, quite apart from not losing its advantage in agriculture. Further, Karnataka’s per-capita manufacture growth too had fallen by a full 2 per cent compared to the previous period. With respect to services too, West Bengal was impressively ahead of the others.

A true eye-opener, however, turns out to be the time series of the difference between per-capita net SDPs of Maharashtra and West Bengal. During the first of our periods, the rate of growth of the series was a depressing 4.4 per cent. Maharashtra was growing appreciably faster than us. However, the figure turns dramatically around to -0.05 per cent in the truncated second period, indicating that Maharashtra was now actually shrinking relative to West Bengal at a marginally small rate. The injurious effects of policies followed by the Marxists in the early Eighties had completely reversed during the period of reforms. And this fact is gloriously borne out further by the state’s performance in the last period, when Maharashtra’s rate of shrinkage relative to West Bengal turned out to be a solid -2.9 per cent. In other words, we are on the verge of out-performing a traditional rival, whatever the present levels of SDP might be.

The recently released Assocham report too reiterates the necessity for manufacture and services growth to exterminate unemployment, the most evil of our economic foes. Policies followed by the government, as our calculations show, appear to be suited to this crucial need of the hour. It is doubtful therefore if the Mock Turtle mourners of the demise of our rural landscape will ever succeed in producing a convincing proof of the proposition that there is something rotten about the destination of the West Bengal economy.

Email This Page