Home / Opinion / Basu raj: West Bengal’s historic blunder

Let’s start with gross domestic product (GDP). In 1980-81, West Bengal accounted for 7.2% of the country’s GDP at factor cost at current prices. Ten years later, that had dropped to 6.1%. By 2000-01, during a decade when the state’s agriculture did very well, its share of GDP went up a bit to 6.3%. The per capita net domestic product of the state, which was 1.02 times the all-India average, went down to 0.96 times in 2000-01.

Also Read Manas Chakravarty’s earlier columns

But the GDP number masks the wholesale destruction of the state’s manufacturing sector, where labour militancy, aided and abetted by the state government, took its toll. The share of West Bengal in the total value of industrial output in India declined from 9.8% in 1980-81 to 5% in 1997-98. A paper by Ajitava Raychaudhuri and Gautam Kumar Basu of Jadavpur University, Kolkata, points out that the share of manufacturing in the state economy declined from 21% in 1980-81 to 13% in 2000-01. Letters of intent issued for setting up industries went down from 41 in 1977 to 28 in 1991, while for Tamil Nadu over the same period they increased from 22 to 68.

Some economists distrust the state’s figures, pointing out that the growth notched up in the 1990s doesn’t show up in its consumption of goods. Perhaps a more reliable indicator would be the state’s share in bank deposits and credit. Reserve Bank of India figures show that in June 1980, bank deposits in the state accounted for 11.4% of pan-India deposits and this fell to 7.3% by March 2000. That’s a proxy for the relative decline in wealth. Also, bank credit in West Bengal accounted for 10.3% of total bank credit in the country in 1980. Twenty years later, its share had fallen to 5.9%, an indication of the lack of opportunities for funding businesses in the state.

Infrastructure development also suffered. Montek Singh Ahluwalia, in a paper—State Level Performance under Economic Reforms in India—refers to Centre for Monitoring Indian Economy data on a Relative Infrastructure Development Index, in which the all-India figure is taken as 100 and states are graded relative to it. In 1980-81, West Bengal’s index was 110.6, implying infrastructure in the state was 10.6% better than the India average. By 1996-97, it was down to 90.8. In contrast Orissa, whose relative index was 81.5 in 1980-81, had improved it to 98.9 in 1996-97.

But perhaps the priority of the Communist government was to focus on social improvement? Unfortunately, the state’s record isn’t particularly outstanding on this count either. According to the Planning Commission’s Human Development Report (HDR), 2001, West Bengal’s rank among the states was eighth in 1981 and the same in 2001. Over the same period, Tamil Nadu improved its rank from seventh to third. Ideology has done precious little for West Bengal’s masses. The state’s own HDR pointed out that “literacy and education indicators in West Bengal are well below what could be expected given the social and political orientation of the ruling state government in the last two-and-a-half decades". It agrees that health indicators are mixed, with good progress in reducing infant mortality, but lower ratios of healthcare per capita compared with the all-India average. Nutrition levels are low and data from the Planning Commission shows that the percentage of children less than three years old classified as underweight was well above the Indian average.

Did Basu manage to reduce poverty levels at least? According to the Dandekar committee estimates, the percentage of people living below the poverty line in West Bengal was 52.2% in 1977-78, compared with the all-India average of 48.3%. By 2004-05, according to Planning Commission figures, the proportion of West Bengal’s population below the poverty line was 24.7%, compared with the all-India average of 27.5%. But over the same period, Tamil Nadu decreased its share of people living in poverty from 52.8% to 22.5%.

In the more deprived rural regions, the percentage of people living in poverty in West Bengal declined from 58.3% in 1977-78 to 28.6% in 2004-05, but that’s still above the all-India figure of 28.3%. Over the same period, the people living under the poverty line in rural Tamil Nadu declined from 56.3% to 22.8%.

The bare numbers, of course, do not tell the whole story. They do not tell of the cadre raj, the political violence and the systematic subversion of the state’s institutions that have marked decades of misrule. And there is no better answer to the state government’s claim on being on the side of the poor than that given by the tribals of Lalgarh.

Basu once famously said that his party had made a “historic blunder" in denying him the opportunity to become prime minister in 1996. After all these years, it should be clear to the people of West Bengal that the really historic blunder was to allow Basu to rule over them for so long.

Manas Chakravarty looks at trends and issues in the financial markets. Your comments are welcome at

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