WIn 1961, East Bengal had the highest per capita income among the large states. At that time it was the richest state in India; Richer than Maharashtra In 2018-19, West Bengal was poorer than Chhattisgarh, a poorer state. This astonishing decline in West Bengal’s relative position is something that political scientists have long studied, with many and conflicting theories as to why and how the decline occurred.
To better understand the second-order effects and correlations of this decline, a useful metric to track is literacy. Generally speaking, the absolute literacy level of a society is something that the government cannot easily promote. After all, there are many older people in the society and if they are illiterate, it is not easy to get them back to school. In contrast, one government and society can focus on is improving the literacy rate of children as compared to older people.
If we look at this metric, we find that West Bengal is second only to Kerala in terms of literacy of people above the age of 80, suggesting that the state was a high performer when it came to prosperity. But it now lags far behind states like Maharashtra, Gujarat and Tamil Nadu when it comes to literacy among children in the age group of 10-14 years, who are yet to go to school. West Bengal has a large negative residual when one plots the literacy rates of these two age groups across states – suggesting that its new mates are Uttar Pradesh, Odisha and Jharkhand.
focus on farmer economy
It is a hobby of the political right to blame the prolonged Left Front rule for this decline. But this ignores the heavy dependence of West Bengal’s economy on agriculture. The Left Front government, through its land reforms, continued this practice of focusing on agriculture and the peasant economy, leading to relatively high growth within the agricultural sector for some time. Agriculture still contributes 12 per cent to the GSDP of West Bengal. It is high in Indian states and points to one of two things: a focus on agriculture if we want to be charitable, or a lack of industrialization if we want to be liberal.
The former was true in the late 20th century as there was political consensus on the focus on agriculture, but since then, it has not yielded any results.
The primary crop of West Bengal is rice. And its yield in 2017-18 was 2,926 kg/ha. is well below global average yield 4,250 kg/ha.
To focus the economy on an activity that is yielding less than two-thirds of the global average – forget the best yield in the world which is close to double the global average – is by definition sub-optimal. And for such a large segment of the workforce, more than 65 per cent (according to the Situation Assessment Survey of Agricultural Households, NSSO), work in the agricultural sector results in stagnation of the economy.
And this absence of an economic boom in turn affects the government’s ability to build schools, hire teachers, and focus on the welfare state. This vicious cycle is reflected, in the case of West Bengal, in its relative decline in human development as well. Certainly, there are many other reasons for the lack of economic boom but this is probably the biggest when measured in terms of lost human potential.
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ripe for development
On the other side of this equation, West Bengal has fewer factories than its relative capacity. Its predecessors – Maharashtra, Gujarat and Tamil Nadu – have two to four times the number of factories. West Bengal’s manufacturing sector – what it does exist – is focused on sectors such as metals, chemicals and food processing. These do not generate multiplier effects for new industries such as electronics and automobile manufacturing in Maharashtra and Tamil Nadu.
Furthermore, factories in West Bengal do not create as many jobs as those in other states. As per the 15th Finance Commission report, it is one of the lowest ratio of states’ own tax revenue to its GSDP at 5.44 per cent. This shows that a large part of its economy is either informal or agricultural. And that, the state receives significant support in its budget through central transfers. Both of these indicate untapped potential and lack of industrialisation.
Again, political parties may give reasons that have to do with politics. Some of that may be true, but the focus on the peasant economy was not a unique idea from West Bengal.
Till date we continue this at the level of the Central Government as well. For example, PM Kisan Yojana pays people to stay in unprofitable agricultural sector. Minimum Support Price (MSP) encourages people to grow low yielding crops. It is this combination of factors – some born out of a failure of good faith and some from doing what others wanted but did not – that seems to have pushed West Bengal on a prolonged decline.
But to West Bengal’s credit, it still has relatively strong public health by Indian standards and low population growth. It does not have the exponential population growth of states like Uttar Pradesh, Bihar and Rajasthan, which makes education reform difficult. It has a base that is ready for greater industrialization as economists have long argued. Basic levels of health and education—and even industrialization—exist to move people away from agricultural labor into manufacturing and/or services. This will happen?
Neelakantan RS is a data scientist and author of South vs North: India’s Great Divide. He tweeted @puram_politics. Thoughts are personal.
(Editing by Therese Sudip)