Arka Dutta

Arka Dutta is Senior Manager Awoke India Foundation. He is an MBA and has worked for 13 years in several organizations including Banking, financial, KPO and not-for-profit organizations. He is an HR specialist for the last six years. He has lived in different metro cities of India with primary residence in Kolkata
Development in Bengal can examine 4 or 5 key areas where development in progress can be measured, (a) Agriculture, (b) Health, (c) Education, (d) Employment, (e) Infrastructure. The change in socio-economic and political scenario, irrespective of dominant political party, had denoted the developmental progress of Bengal over the years. According to the Ministry of Finance and The Journal published by PWC we can visualize the actual growth in certain terms and numbers. Focus areas remain the above four and Social Sector entity and self help group system which has laid down a wider perspective and a roadmap for economic progression.

Due to the significant progress in land distribution, Bengal has been in the forefront of agricultural growth. However in the process, industrial development slowed down and the then government had to formulate policies focused on this shift. Policies for bio-technology, IT, ITeS, mines and minerals, public private partnership, housing, tourism, export and incentives were formulated to attract investments. These were designed to give fiscal and tax benefits to investors to invigorate industrial growth. The state government had created a single-window facility for industrial growth called Shilpa Bandhu which has not been able to actively engage investors and became more of an information bureau. Problems in land acquisition are yet another reason behind the failure of the industrial policy. This still signals optimism. According to a study by the Associated Chambers of Commerce and Industry of India (ASSOCHAM), Bengal has attracted about 1,000 live investment projects worth Rs 5.81 lakh crore as on September 2010, out of which 50,000 crores of investment proposals were received in the last one year. The manufacturing sector acquired the lion’s share of 39.3% of the total live investments followed by power (33.5%), services (20.2%) and real estate (5.5%). Bengal has crores worth of investment proposals hang without fructifying.

Growth of the IT and ITES sector: West Bengal has been one of the fastest growing states with regard to the IT sector. Around 500 IT and ITeS companies are operating in the state and they employ more than 60,000 professionals. But this is too little and too late compared to the advanced states like Maharashtra, Karnatake, Telangana, Tamilnadu and NCR region including Delhi, Gurgaon and NOIDA/Thousands of young students migrate to these places for technical education and employment due to dearth of opportunities. Despite several Government initiatives, West Bengal is has a long way to go in institutionalizing e-Governance initiatives.

The economy of West Bengal has been performing below par for long many years. The state was once a forerunner in the manufacture of products such as steel, textile, jute, tea and so on. However, over the years, the focus of the erstwhile government shifted to agriculture and factors like trade unionism forced investors to shift base away from the state to more industry friendly destinations.

Poor fiscal situation: Public finances of the state paint an alarming picture. It leads in per capita debt. It is Rs 2,00,000 crore in debt and the expenditure on salaries, pensions and interest payments on past loans, is around 97% of revenues in the current financial year. The brunt of this has been borne by lack of investments in infrastructure or the delivery of social services, where spending levels are more discretionary.

Decelerating agricultural growth: Agricultural growth in West Bengal was one of the key drivers of its economy and data shows that in the 8th Five Year Plan, agriculture in West Bengal grew by a record 6.2%, more than double the growth clocked by major states. However, the agricultural growth slipped sharply to 2.4% in the Ninth Plan and stagnated at 2.6% in the Tenth Plan, even while the agriculture performance of some of the other states improved.

Land acquisition for industry and infrastructure: Land is a key driver for industrializations large industries require vast tracts of land. However, as the land in West Bengal is mainly agricultural, its acquisition is an problematic issue. The challenge for the government is to address the issue from a holistic perspective, striking a balance between agriculture and industry.

Skilled labour: West Bengal has fallen behind numerous other states in terms of vocational education. Bengal may have skilled professionals with advanced degrees in engineering and management but the state lags behind in vocational skills. Also, due to the industrial decline and migration of companies, the best brains of the state have moved to other states like Maharashtra (manufacturing & finance) and Karnataka (IT & ITES) for better opportunities. The challenge for the state is to build capacity to reduce the skill gap and also try to create opportunities so that there is a reverse brain drain in favour of the state.

Improving physical and social infrastructure:The road density of Bengal is 1.04, below the national average of 1.1. There is an urgent need to improve road infrastructure. Also, the state faces the challenge of reviving the ailing Haldia port. In terms of social infrastructure, the state needs to pay attention to improve healthcare services and education infrastructure. India’s soaring economic growth has resulted in the rise in disposable incomes leading to a surge in demand for both corporate and consumer financial services. This surge has manifested itself in dramatic growth in almost all sectors of the Indian financial services industry. Banking has always been a key driver in the growth of the Indian economy. It has been one of the strongest performing sectors with the demand for credit growing at the rate of more than 20% in the last few years. However, the benefits of the banking sector are yet to reach the poorest of the poor. Technology can be a key enabler in not only improving government initiatives, but also in improving transparency, reducing corruption and lowering the cost of operations for providing such services. In India, government agencies have been using ICT with varying levels of success in order to improve internal operations as well as services offered to businesses and citizens. Apart from this, the success of government policies depend on companies engaged in ICT.

Improving financial inclusion: This can be a key enabler for economic development in the state. Financial inclusion encourages inclusive growth and can increase GDP by more than a percentage point. West Bengal witnessed the highest growth in non-agricultural employment between 2004-05 and 2009-10 amongst all the states in India. The state also witnessed the highest growth in manufacturing employment between 2004-05 and 2011-12.The decline thereafter has been steady with no signs of change.
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