A Development Economy Overview of the Indian state of West Bengal

1. 1
Bengal
Rising
Group 1
Pritam Saha (1311034)
Aswathi Sreedharan (1311006)
Partha Sarathi Pahari (1311388)
Shakti Mahapatra (1311401)
Sushil Kumar Gautam (1311337)

2. Rationale
2
1977
Marichjhapi Massacre(1979)
Nandigram Massacre(2007)
Fire Arm at Purulia (1995)
2014
2011
Ananda Marg(1982)
Singur Protests(2008)
Prof. Ambikash Mahapatra
controversy(2012)
• 35 years of CPIM rule ended abruptly
• Both governments riddled with controversy
• Society versus industry debate
Why West Bengal?
What we are exploring?
• Major Economic Changes
• Major Industrial Changes
• Changes in Social Sector
CPIMTMC

3. Economy
 6th largest state economy of the country with a GSDP of INR 3,538.1
bn. as of 2012-13 (2004-05 constant prices) and contributes 6.4% to
the national economy (INR 55,054.4 bn. at 2004-05 constant prices)
 The GSDP CAGR of 6.8% has under-performed the national CAGR of
8.01% in the period between 2004-05 to 2012-13
 Growth has started to accelerate with the Trinamool Congress coming
to power in May, 2011 and the GSDP Growth Rate exceeding national
GDP Growth Rate (W.B. GSDP Growth Rate – 7.5% and Indian GDP
Growth Rate – 5.0% in 2012-13)
 Per capita GSDP growth rates have been consistently lower than the
national average with the trend changing only since FY12 with the
Trinamool government coming to power. This is in spite of the lower
population growth rate of the state compared to the national average
Source: Data Book for use of Deputy Chairman, Planning Commission, March 2014. All
figures in INR billion
6.3%
7.8% 7.8%
4.9%
8.0%
6.1%
6.3%
7.5%
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
7.0%
8.0%
9.0%
-
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13
GSDP and GSDP Growth Rate
GSDP in INR bn. (FY05 constant prices) GSDP Growth Rate
CAGR – 6.8%
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13
W.B. GSDP Growth vs. India GDP
Growth (at 2004-05 Constant Prices)
W.B. GSDP Growth Rate India GDP Growth Rate
CPM Era TMC Era
Key Highlights
5.1%
6.7% 6.7%
3.0%
6.8%
5.4% 5.4%
6.7%
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13
Per Capita GDP (at 2004-05 Constant
Prices) and Population Growth Rates
Comparison
W.B. Population Growth
India Population Growth
W.B. GSDP Per Capita Growth Rate
India GDP Per Capita Growth Rate
Financial Crisis
3

4. Sectoral Economy
14%
11%
15%
1%
8%
51%
W.B. GSDP Breakdown FY13
Agriculture & Allied Agriculture Industry
Mining & Quarrying Manufacturing Services
 West Bengal is primarily driven by Services (51%) with Agriculture
(Agriculture & Allied + Agriculture) (25%) and Industry (Industry +
Manufacturing +Mining & Quarrying) (24%) accounting for the rest
of FY13 GSDP
 The trend of lower total growth rates than the national average is
captured in the sectoral growth rates decomposition, except
Agriculture which has been anomalous
 Post-TMC the growth rates in all sectors have picked up and exceeded
the national averages
 Agriculture has grown at a CAGR of 2.3% (India – 3.7%), Industry at
5.3% (India – 7.4%) and Services at 9.0% (India – 9.6%)
 The share of Agriculture has steadily declined in the state from 33%
(FY05) to 25% (FY13) while that of Services has steadily increased
from 41% (FY05) to 51% (FY13)
Key Highlights
4
-5.0%
0.0%
5.0%
10.0%
FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13
Agricultural Growth Comparison
W.B. Agriculture Growth India Agriculture Growth
-5.0%
0.0%
5.0%
10.0%
15.0%
FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13
Industrial Growth Comparison
W.B. Industry Growth India Industry Growth
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13
Services Growth Comparison
W.B. Services Growth India Services Growth

5. State Finances
5
 West Bengal’s Planned Expenditure declined from 4.2% (FY06) to
3.3% (FY11) of the national allocation, coinciding with the end of the
CPM regime. Post-TMC the proportion has bounced up from 3.3% in
FY10 to 4.7% (FY12) and 4.5% (FY13)
 West Bengal has a high debt burden historically and has been given
special concessions by the 13th Finance Commission for achieving the
fiscal correction targets of eliminating revenue deficit and achieving a
fiscal deficit of 3% by 2014-15 which have been achieved already
 There has been a 23% increase in revenue receipts in FY13(RE)
and it has been growing at an average 26% in the 3 year period
FY11-13 whereas revenue expenditure grew by 16% in FY13(RE)
with the same expected to grow at a lower pace of 8% in FY14(BE)
 There has been a significant improvement in all indicators post
FY12 TMC regime coming into power
Key Highlights
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
1995-96 to 1999-
2000
2000-01 to 2004-
05
2005-06-2009-10 2010-11 to 2013-14
(BE)
Debt Performance Indicators
Debt/GSDP Ratio (Average) Interest Payments to
Revenue Receipts
Interest Payments to
Revenue Expenditure
Interest Payments to
GSDP
-1.0%
-0.5%
0.0%
0.5%
1.0%
1.5%
2.0%
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
2004-08 2008-10 2011-12 2012-13
(RE)
2013-14
(BE)
Deficit Indicators
Revenue Deficit/GSDP Gross Fiscal Deficit/GSDP
Primary Deficit/GSDP
3.8%
4.2%
3.7% 3.9% 3.7% 3.9%
3.3%
4.7%
4.5%
0.0%
0.5%
1.0%
1.5%
2.0%
2.5%
3.0%
3.5%
4.0%
4.5%
5.0%
-
50.0
100.0
150.0
200.0
250.0
300.0
FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13
West Bengal Planned Expenditure
West Bengal Planned Expenditure (INR bn.)
State as %age of Nation

6. Agriculture and Manufacturing
 Agricultural Production ranks 4th in India and
contributes to 8% of production
 Major crops – Jute, potato, rice, pulses and
wheat
 Land reforms under CPIM rule
• Effective imposition of land ceiling and
vesting of ceiling surplus land
• Redistribution of vested land among the
landless cultivators
• Operation Barga
 Under TMC regime
• Agricultural growth has slowed down further
to 2.2% (2012-2013)
• Farmer suicides. Mostly cultivators of paddy
and potato
 Reasons for distress
• rising cost of inputs like fertilizers
• weaknesses in the procurement machinery
6
0
20,00,000
40,00,000
60,00,000
80,00,000
100,00,000
120,00,000
140,00,000
160,00,000
8,00,000
8,50,000
9,00,000
9,50,000
10,00,000
10,50,000
11,00,000
Agriculture (in INR mn.)
WB India
Jute fields, West Bengal
Key Highlights

7. Manufacturing
7
 Contribution of investments to manufacturing has
been less than 4% over the last 30 years
 During the ISI regime West Bengal got a
disproportionately smaller share of industrial licenses
 The state industrial policy of 1993 enacted by the
CPIM
– providing a package of assistance to new units,
expansion of existing units and rehabilitation of
sick units
– Tax concessions
 However statistics show a different picture -
contribution of manufacturing 18% in 1980-81 ,
steadily fell to around 13% in 1990-91 , further fell to
around 10% by 2000-01
 Under the TMC regime
– Increased marginally to 11.14% by 2011-12 but
again fell to 10.39% in 2012-13
 Major problems under TMC regime
– Stiff resistance to land acquisition for private and
SEZs
– Lack of credible compensation and rehabilitation
policy
0
10,00,000
20,00,000
30,00,000
40,00,000
50,00,000
60,00,000
70,00,000
80,00,000
90,00,000
0
50,000
1,00,000
1,50,000
2,00,000
2,50,000
3,00,000
3,50,000
4,00,000
Manufacturing (in INR mn.)
WB India
Singur Tata Nano Controversy
Key Highlights

8. Services
8
 Accounts for nearly 60% of the state’s GSDP
 Primarily comprises of transport and
communication, trade, hotels and restaurant,
banking and insurance, real estate and ownership
of dwelling and business services, public
administration, other services
 Employs upto 100,000 people
 Under the CPIM regime
– IT industry saw its inception 1992-93. Six IT
parks setup in Kolkata
– Major fillip to the industry came under the CPIM
government in year 1999-2000 when 138 firms
entered into the IT industry
 The TMC government
– The robust growth of services still continue
– Target of achieving 25 %share in the nation’s IT
sector
– Introduction of e-Governance
0
50,00,000
100,00,000
150,00,000
200,00,000
250,00,000
300,00,000
350,00,000
0
5,00,000
10,00,000
15,00,000
20,00,000
25,00,000
Services (in INR mn.)
WB India
DLF IT Park, Kolkata
Key Highlights

9. Minerals and Mining
9
0
2,00,000
4,00,000
6,00,000
8,00,000
10,00,000
12,00,000
23,000
24,000
25,000
26,000
27,000
28,000
29,000
30,000
31,000
Mining
WB India
 Produces 23.5% of Total Coal Production in
India
 Coal alone accounts for 98% of the mineral
production in the state
 Other minerals produced in the state include
Natural Gas, Apatite, Clay, Felspar, Fireclay,
Kaolin , Quartz and Silica Sand
 State accounts for 3.8% of the mineral
production in the country. Ranked 7th.
 Employs upto 100,000 people
 Under the CPIM and TMC regime
– Illegal coal mining and coal mafia still
continue to cause losses to the tune of 40,000
tonnes annually.
– Hardly any judicial action has been taken
against such reports.
 But overall growth stable and much better
compared to India statistics.
Raniganj Coalfields
Key Highlights

10. Health
10
 Reported incidence of disease (2004): average number of
people reporting illness per 1000 population – 114 (rural),
157 (urban). Incidence of illness lower in West Bengal
than other states.
 Access to sanitary facilities (Census 2001): low (56.3% HH
no access to sanitary facility); rural areas- 73.1% HH do
not have toilet facility
 More than 85% of doctors concentrated in urban areas.
 Utilisation of government facilities for outpatient care: low
(National Sample Survey 60th Round) due to bad
treatment, poor accessibility, long waiting time. 33% of
population did not use government facilities.
 Policies : Employees’ State Insurance (ESI) Scheme;
Community health care management initiative (CHCMI)
 Large rural-urban difference in health status of women &
children.
 TMC initiatives:
– Rashtra Swastha Bhima Yojna (2011-2012)
– Piped water supply to people of Jangalmahal region
– Sick new-born care units numbers increased
– Capacity increase for doctors
– Fair price shops
0
10
20
30
40
Birthrate/perthousand
Birth rate
W.B India
0
5
10
15
Deathrate/thousand
Death Rate
W.B India
0
50
100
150
IMR/perthousand Infant Mortality Rate
W.B India
Key Highlights

11. Employment
11
 Earlier:
– Employment growth outside agriculture- low
– National Rural Employment Guarantee Scheme
(NREGS)
 TMC initiatives:
– Employment Bank Portal created
– Swami Vivekananda Swanirbhar Karmasansthan
Prakalpa - Self Employment of Unemployed Youth.
– State Assisted Scheme of Provident Fund for un-
organized Workers (SASPFUW)
– FICCI enters into MoU with WB government for skill
development initiatives through PPP
53%
11%
12%
24%
Sector wise employment India 2009-10
Agriculture Manufacturing Non-manufacturing Services
43%
19%
8%
30%
Sector wise employment W.B. 2009-10
Agriculture Manufacturing Non-manufacturing Services
Key Highlights

12. Education
12
Shantiniketan, Kolkatta
0
10
20
30
40
50
60
70
80
90
1951 1961 1971 1981 1991 2001 2011
Literacyrates(in%)
Literacy Rate
West bengal India
 1998-2000 data: 1
– Ratio of primary to upper primary schools: high (ideal
1:2); High pupil- teacher ratio
– Primary school dropout ratio >50% (high)
– Number of years taken for students to become primary
school graduates- 14 years (high)
– Lower than average efficiency of education system
based on input/output ratio (i.e # of students who
enter in grade 1 and the # who come out from grade 5
in 5 years)
– Lower transition rate from primary to upper primary
levels
– Out of 33.06 million out-of-school children (6-11
years), 4.61 million from West Bengal
 TMC initiatives:
– 903 Secondary Schools upgraded to H.S. level.
– The West Bengal State Higher Educational Institutions
(Reservation in Admission) Bill, 2013 passed.
– Kanyashree Prakalpa – 2013- for welfare & education
of adolescent girls of economically week families.
1 Education For All in India with Focus on Elementary Education: Current Status,
Recent Initiatives And Future Prospects:
http://www.educationforallinindia.com/page101.htm

13. 13
Q & A