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The Economic Advisory Council to the Prime Minister issued upbeat research that revealed West Bengal’s economic trajectory had consistently declined over the previous several decades. Relative Economic Performance of Indian States: 1960-61 to 2023-24, a working paper written by Sanjeev Sanyal, identifies a concerning tendency for the state that was previously a major player in India’s economic environment.
A Fall from Grace
West Bengal’s contribution to the national GDP has drastically decreased from its former position as a major player in the Indian economy. The state made a significant contribution of 10.5% to the GDP of the country in 1960–1961. By 2023–24, that contribution had dropped to a pitiful 5.6%. This decrease is an indication of more serious structural problems that have hampered West Bengal’s economic success rather than just being a statistical anomaly.
The report mentions that in 1960–61, West Bengal’s per capita income—which was 127.5 percent more than the national average—was higher. By 2023–24, the state’s relative per capita income dropped to 83.7% of the national average due to its growth trajectory failing to keep up with national trends. This further emphasizes West Bengal’s economic difficulties by placing it below historically lagging states like Rajasthan and Odisha.
Comparative Performance: A Regional Snapshot
In the study, West Bengal and other regions are contrasted sharply. Particularly the southern states have shown impressive economic growth. Southern states were catalyzed into a leadership position in India’s economy by the post-1991 economic reforms. Currently, the combined GDP of Karnataka, Andhra Pradesh, Telangana, Kerala, and Tamil Nadu is over 30%.
Southern states did not perform exceptionally well economically prior to 1991. But there was a dramatic change during the liberalization period. There has been a significant shift in the economic balance, with all southern states now boasting per capita incomes above the national average.
Notable economic diversity is also present in the north. States such as Delhi and Haryana have become important actors; throughout the research period, Delhi recorded one of the highest per capita incomes.
Diverging Fortunes of Industrial Clusters
The three biggest industrial clusters in India in the 1960s were located in Maharashtra, West Bengal, and Tamil Nadu. Their economic trajectories greatly differed throughout the years. West Bengal’s economic share has been steadily declining, whereas Maharashtra’s performance has stayed comparatively stable. After a period of decline, Tamil Nadu had a strong recovery with the implementation of the 1991 economic reforms.
This gap demonstrates how different reactions to regional dynamics and economic policies have influenced these industrial clusters’ performance.
The Case of Odisha and Bihar
Odisha, which has always lagged behind, has made remarkable progress in the last several years. The state’s expansion serves as a welcome diversion from the otherwise alarming patterns in eastern India. On the other hand, although Bihar’s economic situation has stabilized during the past 20 years, it still lags behind other states. According to the publication, Bihar must grow faster in order to catch up with more developed states.
Broader Implications
Important new information about India’s regional economic disparities is provided by the findings of the working paper of the Economic Advisory Council. The significant variations in economic performance among states highlight the influence of policy modifications, industrial expansion, and regional development tactics.
The figures are a sobering reminder to West Bengal of the necessity of focused economic reforms and revitalization initiatives. The state’s downfall represents not only a financial loss but also a squandered chance for expansion and advancement that could have supported the US economy.
To summarize, India’s ability to manage its economic possibilities and difficulties depends critically on how well each of its states performs. The ongoing economic downturn in West Bengal, when compared to the growth of southern states and the noteworthy progress made in Odisha, points to larger patterns that need to be addressed by stakeholders and policymakers.
In addition to highlighting these problems, the Economic Advisory Council to the Prime Minister’s working paper provides a call to action for developing plans that can turn around underperforming areas and fully use India’s varied economic terrain.
