West Bengal in the Year 2020 by Dr.Parames Ghosh E- mail: mamata@tpg.com.au This page has been viewed  times.
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Introduction I lost the first draft of this important article. Perhaps, it would help; when I first started writing this article, I was very emotional about one ridiculing remark against West Bengal. Now I have accepted that remark, sat down to take stock of facts and plan where West Bengal could be in year 2020. It all started from an innocuous email praising sweetmeats from West Bengal and things we like there. Then one of us asked us to listen to one begging voice – “Could you please give me a job – any job; any job will do”. We listened – the same plea is echoing all over West Bengal. We need to do something to make people engaged in productive work that helps them earn their livelihood and contribute to the well being of West Bengal, India and the World. We need to help WB have better infrastructure - better roads, better power and water supply, easier access to doctors, easier supply of medicine and essential goods, and more jobs for our youth. If we review the history of statistics of industrial and agricultural production, we find that West Bengal was in the forefront of Indian economy in the pre-independence era. It was true - “What Calcutta thinks today, India will think tomorrow”, Bengal then produced enough rice, cloth and jute to help feeding and clothing Indians. Before independence Bengal was top in the world in the jute industry. After independence, the jute industry suffered because factors of production, raw materials and machinery were divided between East Pakistan and West Bengal. Later, the demand of jute dwindled; jute was largely substituted by plastic products. Still, during the period of 1960s WB was dominating in production of food products, textiles, rubber plastic and petroleum products, basic chemical and chemical products, basic metal and alloy, and manufacture of machinery and equipment (including electrical machinery). Over the next four decades, the share of these industries in India’ s GDP fell sharply. While other states of India adjusted to the new product mix of India and contributed to India’s GDP and added values at all India level. So if we compare WB’s present production performance with that of the past, we find the present West Bengal has lost much of her pace. Similarly, if we compare WB’s present production performance with that of any other state, we find that WB is trailing behind. We need to find out what should be the strategy to get the required pace, so that WB could become a better place to live in. We have to consider various facets of WB’s productivity. During 60s, West Bengal was a good agricultural producer, though India, as a whole, was not self-sufficient. India has now earned self-sufficiency and can even help poorer countries in Africa. What is the status of West Bengal? Has WB started producing multiple crops in a year, like most other states in India? WB has to check what food products can be grown during various seasons of the year. Why manufacturing production is low in WB? Is it because of less inputs to production, or less productivity or both. Is industry in WB more labour-intensive compared to the industries in the other states. Are the factories being taken away from West Bengal because of industrial unrest? We need to find out the answers to the above questions. The answers may be different for different industries. We need to find them and take appropriate actions to bring WB at par with the developed world. In this paper, we like to explore what we can do to improve the state of economy of West Bengal. We shall see what WB was in 1960s, and see what needs be done to match the demand of today rather than those in 1960s. We shall see what other states of India and world at large are doing to increase the productivity of agricultural and industrial production and adjust our strategies. We might need to change the product mix in both industrial and agricultural fields, produce different products, and produce more often. We might need to change the mix of factors of production, more capital intensive plants and machinery instead of labor intensive facilities. We might to need to check why entrepreneurs want to move the industries away from West Bengal. If we find certain rules and regulations of WB or India are deterrent, we need to identify them to the public media and get them changed. We need to ensure that nothing stands in the way of making WB more productive and employing all residents of WB to contribute to the progress of WB and India. When we know that we can do things and bring changes here, we need to set a target of what needs be achieved. In Appendix-I, we may check the current Economic Profile of WB, and we need to project the Economic Profile of the year 2020. To do this, we need to consider the growth in demand of various goods and services in WB, in India and in the world, and see how we can respond. We need to check the Economic profile of other states in India and see how we can benefit by competing and/or co-operating with them. After we set a target, we need to make a project plan to achieve the targets. There are a number of participants in this project. The government, business and society need to work together. The universities need to skill the students not only to serve the employers in the existing industries, but also they need to prepare the students to set up the industries WB need. The industrialists need to find out where to invest more to make WB self –sufficient and capable of exporting to other countries in the world. The government need to ensure that all rules and regulations are in place to thrive the industry, not to move the industries away from West Bengal. The people in West Bengal need to work to increase productivity, there is no point in stopping work to avoid exploitation by the employers, when you cannot produce enough to compete with other countries of the world. We also invite Banks and financial institutions to lend money to entrepreneurs to wants to establish industries that are I high demand; Banks, them selves may act as entrepreneurs by engaging suitable consultants. As this paper is being authored mainly by people who are aged 60 and above, we have a special appeal to retired and retiring people. For example, you are an expert in Power Plant design and construction, and there is a sick industry which is getting closed down because no entrepreneur wants to spend money on it, nor the workers’ union let people work at a salary that can make the plant break even. You may try to meet the owners of the industry and entrepreneurs and persuade them to re-start their industries, showing them opportunities of making good revenues. You may even consider making low- cost battery/generator sets for exporting to China, who are now very much hungry for power in their manufacturing factories. In response to China’s demand for raw material, other countries are increasing the outputs from their mines; can India or West Bengal make the best use of the situation? West Bengal needs to review their product mix as well as the mix of production facilities, say from less capital-intensive to more capital-intensive. This paper is only a start to explore what needs be done. Each individual area need be researched and appropriate strategies need to be put in place. We need many volunteers for this research and action plans. We invite all above-60 mature brains to work on this. In some cases, you may directly meet the stake holders and solve the problem, in other cases you may need to pull more resources together, and convince the government and the industry and the media to take appropriate steps. In the following paragraphs , let us take stock of strengths and weaknesses, opportunities and threats, considering both past and present of WB and her neighbours, before we prepare a vision of West Bengal in the year 2020. West Bengal now vis-à-vis West Bengal in 1960 Table 3: Index of Industrial Production -Compound Growth Rate for West Bengal vis-à-vis All-India |
| (Per cent) Period Mining & Manufacturing Electricity General Quarrying 1 2 3 4 5 1970-71 to 1980-81 (at 1970=100) West Bengal 0.01 1.82 1.43 1.62 All-India 4.26 4.05 7.33 4.42 1980-81 to 1992-93 (at1980-81=100) West Bengal 0.10 1.84 8.80 2.23 All-India 6.94 6.41 8.63 6.75 1993-94 to 2000-01 (at 1993-94=100) West Bengal 0.78 3.37 6.59 3.62 All-India 3.98 7.63 6.40 7.20 Sources : 1. Economic Review, Government of West Bengal, various issues. 2. Handbook of Statistics of Indian Economy, RBI, various Issues. |
Table 4: Percentage Share of West Bengal in All-India |
| Period NVA Employment 1 2 3 1959-60 23.2 23.1 1960-61 to 1969-70 20.1 21.3 1970-71 to 1979-80 12.8 14.9 1980-81 to 1989-90 8.5 10.8 1990-91 to 1999-2000 5.4 8.4 |
Industrial Deceleration The industries which played a vital role in West Bengal during the period of 1960s were food products (20-21), textiles (23-25), rubber plastic and petroleum products (30), basic chemical and chemical products (31), basic metal and alloy (33), and manufacture of machinery and equipment (including electrical machinery) (35-36). All these industries contributed significantly to all India net value added in respective industries during 1960. However, over the next four decades, the share of these industries in net value added to all-India level fell sharply. The share of textiles went down to 12.3 per cent in 1999 from 16.2 per cent in 1960 while that of chemical products went down to merely 0.7 per cent from 16.4 per cent over the same period of time (Table 6). Further, the share of food products fell to 2.8 per cent in 1999 from 13.5 per cent in 1960. While machinery and equipment including electricity contributed 33.9 per cent during 1960, the joint contribution of these two industry groups to value added came down to only 3.8 per cent in 1999. Rubber, plastic and petroleum products showed an even more dismal picture as their contribution came down from 43.2 per cent in 1960 to a mere 1.7 per cent in 1999. On the other hand, the contribution to all-India net value added increased for some industries such as food products; rubber, plastic, petroleum; and basic metal and alloys. It is also interesting to note that the share of manufacturing sector in total net value added has gone down from 90.0 per cent in 1970 to 59.2 per cent in 1997-98, while in case of India, the fall has been relatively moderate (from 88 per cent to 81.2 per cent during the same period). The industries which have taken up the share from core manufacturing sector are electricity, gas, water supply, non-conventional energy, storage & warehousing services, sanitation, etc. As we have seen in Table 3, the IIP growth in electricity has gradually increased from 1970-71 to 1999-2000. That means contribution of electricity in overall industrial sector has been high in West Bengal. But it is also true that the growth of electricity is not high enough to generate high industrial growth. This is evident from the low industrial growth depicted in Table 3. Table 5: Industry-wise Performance of Major Indicator (1973-74 to 1999-2000) |
| Negative Below Between Above 4 per cent Above 2 per cent 2 and 4 and below 7per cent per cent 7 per cent 1 2 3 4 5 6 NVA 31,37 23-25,34,35- 28,29,33 20-21, 26, 30, 22 36,38 27, 32 VO 37 23-25 28,35-36 20-21, 29, 30, 22, 26, 27 31, 32, 33, 34, 38 EMO 28, 31, 35-36, 23-25, 29, 34, 20-21, 22, 26, 37 38 27, 30, 32, 33 TE 23-25, 28, 29, 20-21, 26, 30 27, 22 31, 32, 33, 34, 35-36,37,38 FC 37 31 23-25, 30, 32, 33, 20-21, 22, 26, 34, 35-36,38 27, 28, 29 Note :1. NVA : Net Value Added; VO: Value of Output; EMO: Emoluments; TE : Total Employment; FC: Fixed Capital 2. Explanations of industrial codes are given in Annex 2. |
Table 6: Share of Net Value Added of Select Industries in West Bengal to All-India |
| Year Food Textiles Rubber Basic Basic Manufacture of All Products (23+24+25) Plastic, Chemical and Metal machinery (20-21) Petroleum Chemical and Alloy including elec- etc. Products (33) trical machinery (30) (31) (35-36) (1) (2) (3) (4) (5) (6) (7) (9) 1960 13.5 16.2 43.2 16.4 10.6 33.9 22.3 1965 10.8 19.7 48.1 12.5 8.5 29.3 21.6 1970 8.5 16.5 30.2 8.6 6.7 16.1 14.0 1974* 8.6 15.2 15.1 7.6 16.6 14.8 12.9 1980 3.9 16.7 7.2 5.7 16.5 10.7 11.3 1985 6.5 11.2 5.2 3.9 17.0 6.3 8.6 1990 4.6 9.4 4.5 6.5 8.5 6.4 6.2 1995 2.4 9.8 2.3 4.0 8.3 6.1 4.7 1999 2.8 12.3 1.7 0.7 6.2 3.8 3.7 * Data for 1975 is not available. Source :Annual Survey of Industries, Government of India, various issues. |
West Bengal vis-à-vis Other States in India Other states have improved their contribution to India’s GDP in last four decades. Multiple crops in different seasons of the year have made the land more productive. There has been substantial growth in dairy and other food products too. In industry, new product mixes are being used to adapt to the demand of the age. Electronic and telecommunication products are being produced more than products like plastics where demands are falling fast. Plants and machinery are made capital intensive to increase productivity. WB needs to adjust the mix of products and factors of production. West Bengal vis-à-vis Any Other Developed Country Other developed countries have improved their GDP in last four decades. Multiple crops in different seasons of the year have made the land more productive. There has been substantial growth in dairy and other food products too. In industry, new product mixes are being used to adapt to the demand of the age. Electronic and telecommunication products are being produced more than products like plastics where demands are falling fast. Plants and machinery are made capital intensive to increase productivity. WB needs to adjust the mix of products and factors of production. Strengths of West Bengal Literacy is high in WB, and most skilled technicians are versed in English language as well. This ensures supply of skilled people who can contribute to the demand of industry not only in India but abroad as well. Weaknesses of West Bengal Labour unrest in WB has moved industries away from WB. People here have been trained to avoid exploitation by industrialists who might benefit from the surplus. But in this process, the labour does not add values to their products and earn the extra remuneration. Opportunities before West Bengal WB has adequate infrastructure for many industries, which can be started here to meet the demands of the day. Production facilities for manufacturing cars are available here, and there are high demand for cars. Threats before West Bengal WB needs to improve their roads, transport and power supply. Car manufacturing facilities need to be suitably modified and tailored to produce modern cars that are in demand now. Current Status of West Bengal Agriculture Manufacturing Services Infrastructure Vision for West Bengal 2020 Agriculture Manufacturing Services Infrastructure What needs be done to get there Conclusion Though we still in the process of visualizing West Bengal’s status in the year 2020, we recommend following action plans to help West Bengal to achieve her targets. 1. Research should be carried out for having multiple crops in West Bengal in different seasons. Crop-mix should be designed to meet demands of the country and the export potential. 2. Product-mix of the industries should be researched to ensure that we produce goods and services, that are in demand in WB, India and abroad. 3. Mix of factors of production need be researched to improve productivity. Often capital intensive plants and machinery increased productivity, though labour intensive machinery is expected to employ more staff. 4. Banks should be encouraged to invest in industries that would produce goods which are I demand all over the world. 5. Universities should be encouraged to produce entrepreneurs, not only the skilled staff that can serve existing industries. 6. Industries should sponsor university students who develop skills that would serve in industries that will serve the prospective demands of the country. 7. Identify the rules and regulations of the state – West Bengal and India – that are deterrent to growth of industries. Lobby in the media for changing those rules and regulations. 8. Identify the problems, which can be solved by a skilled retired person who can advise and negotiate with the stakeholders to revive the sick industry. A number of people may join hands to solve such problems, if necessary. 9. Collate facts and figures to project economic profile of West Bengal in the year 2020. Prepare a vision of West Bengal 2020, and a project plan to get there. 10. Make the people of West Bengal aware of the vision of West Bengal 2020 and the roles of various people in the project. Publish papers in the newspapers and journals, Stage dramas, produce documentaries in the TV, use songs and cartoons if appropriate. Appendix – I Source: http://www.economywatch.com/stateprofiles/westbengal/profile.htm Economic Profile of West Bengal. Appendix – II Source: Financial Daily from THE HINDU group of publications Saturday, Jan 24, 2004 Lack of demand hits Bengal small sector ,Our Bureau Kolkata , Jan. 23 ABOUT 43 per cent of a total of 1.25 lakh permanent registered small-scale units covering various industry segments, have remained un-operative in West Bengal due to lack of demand for their products. Among these units, a section of them are seasonal in nature. This was revealed here on Friday by Ms Mira Pandey, Principal Secretary in the State's Department of Cottage & Small Scale Industries. Although 57 per cent of the total permanent registered units are operating, Ms Pandey observed that many of them might find it difficult to compete once WTO regime becomes fully operative from mid-2005. She said that the State had two types of registration procedure, one permanent and the other provisional. Taking into account both categories, the number of registered small units in the State would be about 3.25 lakh. She said that most of the small-scale units were independent in nature. At the most, a total of 125 units in Durgapur and Asansol industrial belts operate as ancillary to large industries in that belt. There was a strong possibility of these units being revived as more jobs were expected to be generated by large-scale units in the same area. Speaking at an interactive session on `Small-Scale Industries in West Bengal: Problems & Prospects', Ms Pandey said local small-scale units were facing restricted buying support because they did not maintain quality, cost and the despatch schedule. She advised promoters of these units to modernise their plant so that they could produce at competitive cost and improve productivity. She said metal-based industries were doing well in the small-scale sector. There were about 11,000 registered companies in this category in the State. Fresh investments were coming in a big way into sponge iron and foundry projects. Similarly, food processing units, hosiery and garment sectors were well poised to leap forward because many units in these sectors were modernising. Under the small-scale sector, the State has a total of 7,249 food-processing units and 5,123 hosiery/garment manufacturing units. Her department is convinced that the maximum limit of capital outlay for a small-scale unit should be revised to the range of Rs 5 crore instead of Rs 1 crore now. She felt the knowledge-based industries should be treated as small-scale industry, de-listing them from service sector. The State Government has already taken up the matter with the Union Finance Ministry and the Reserve Bank of India. The Calcutta Chamber of Commerce, which organised the interactive session, has pleaded that there should be a single legislation covering all labour matters and the enactment may be called "Small Scale & Tiny Industries Regulation Act". On the contrary, the RBI has been urged to examine the feasibility of fixing the share of SSI, tiny and village industries in the total bank credit and term loans from the financial institutions and banks. Appendix – III Source: Financial Daily from THE HINDU group of publications Wednesday, Jul 10, 2002 CAG faults Bengal pollution control board ,Indrani Dutta KOLKATA, July 9 AT least 3,850 industries in West Bengal, including 525 major polluting units, were running without the consent of the West Bengal Pollution Control Board as on March 2001. These include coalmines, tanneries, foundries, anodising and galvanising units, acid manufacturing units, ceramic units, brickfields, and asbestos product-making units, a recent study has revealed. According to the Air Act of 1981, polluting units are required to take pollution control measures for treatment of emission before discharging it into the air and the WBPCB's consent was mandatory for any industry to continue its operations. Polluting industries are categorised into three groups according to their discharge and emission possibilities. These are red (major), orange (medium) and green (minor). There is also the category of special red, under which falls the grossly polluting units. However, WBPCB contributed to the State's environmental degradation by granting consent till April 2000 to 1,775 out of the 2,300 red category units, according to the report of the Comptroller and Auditor General. Pointing out that the performance of WBPCB in controlling air pollution was grossly ineffective, the report said that although the Board issued non-compliance notices to some of the grossly polluting units, there was little follow-up action and the industries continued to violate the norms. The CAG passed comments on the testing standard itself of WBPCB saying that despite the fact that the Board could not utilise a Rs 4.5-lakh grant from the State Government in 1995-96 for procurement of laboratory equipment, it was often not in a position to assess the pollution status of units due to lack of testing facility. Against total grants of Rs 45.23 crore received from the State Government between 1997 and 2001, the State Environment Department could spend only Rs 23.05 crore. The Board failed to utilise its own money too. Out of the Rs 53.36 crore which it received from issuing NOCs, consents and sale of forms between 1996 and 2001, only Rs 32.91 crore has been spent. Turning to air pollution, the report said that while the transport sector contributed 50 per cent of the State's air pollution (with industry contributing 48 per cent), the State Government had not implemented any policy for phasing out old vehicles. Regarding industrial emission, the report noted that emissions from industries, including thermal power stations, was the major source of air pollution. However, although Durgapur and Howrah were identified as critically polluting zones by the Central Pollution Control Board, WBPCB did not conduct any comprehensive study to assess the impact of pollution on environment and public health in these zones. Appendix – IV Source: http://www.ganashakti.com/old/1999/990329/bengal.htm Revival of sick industries: LF Govt. to offer loans Appendix – V Source: http://pd.cpim.org/2003/0727/07272003_thinking%20together.htm People's Democracy (Weekly Organ of the Communist Party of India (Marxist) Vol. XXVII , No. 30, July 27, 2003 THINKING TOGETHER Since the Left Front government came to power in Bengal, the state's economic performance has been on the decline. Can the people have any hope of better livelihood as long as the state government patronises labour unrest? --- K L Mehta, Mumbai Appendix – VI Source: http://voanews.com/bangla/archive/2005-08/2005-08-05-voa3.cfm Land Reform Amendment Bill Passed in West Bengal Assembly By Paramasish Ghosh Roy,Kolkata, 05-August-2005 Appendix – VII Source: http://www.viewsunplugged.com/VU/20040513/reflection_wb_pf.shtml Frozen! The Real story of West Bengal's backwardness. Hiren K Bose Appendix – VIII Source: http://www.viewsunplugged.com/VU/20040513/reflection_wb_pf.shtml Twenty-five years of Left Front Government in West Bengal Solemn Promises and Sordid Performance. Appendix – IX Source: http://www.revolutionarydemocracy.org/rdv9n1/westbengal1.htm West Bengal: The Neo-Liberal Offensive in Industry and the Workers’ Resistance Kushal Debnath. Appendix – X Source: http://pd.cpim.org/2005/1106/11062005_benoy%20kumar.htm People's Democracy, (Weekly Organ of the Communist Party of India (Marxist),Vol. XXIX,No. 45 November 06, 2005 Appendix – XI Source: http://www.wbidc.com/old/industries/promoting_agencies/promoting_agencies1.htm Agencies promoting industries in West Bengal. Appendix – XII Source: Trends in Total Factor Productivity of Manufacturing Sector in West Bengal: A Sectoral and Temporal Analysis. Sadhan Kumar Chattopadhyay* ****************************** |