The Indian Wire » Business » Slowed Economics: A sneak peak inside West Bengal’s power tussle
Business Politics

Slowed Economics: A sneak peak inside West Bengal’s power tussle

As West Bengal Chief Minister Mamata Banerjee fights perhaps her most significant electoral battle, the battle isn’t what you would call a classic BJP vs Trinamool politics but more specifically will also include the state’s economics as well.

The anti-incumbency that Banerjee now faces has a lot to do with the state’s economics and alleged local level corruption prevailing in the state under Mamata Banerjee’s tenure. The alleged corruption charges and obtuse economic policies has reportedly led to stagnant industrialization, weak credit score development, low infrastructure growth, a near-freeze in new jobs and agriculture spend.

Though the Bengal economy is showing signs of stagnation and is recording low GSDP growth but in 2019-20, West Bengal’s GDP grew by 7.26 percent which was higher than the national GDP but as aforementioned, for four of the five years between 2015-16 to 2019-20, West Bengal’s GSDP growth has been significantly lower than the national figure.

Additionally, RBI data shows that West Bengal has been one of the poorest performers on bank credit growth. Reportedly, between the fourth quarters of 2018 and 2020, while aggregate credit of scheduled commercial banks all over India grew by 20 per cent, West Bengal saw growth of mere 10.6 per cent.

According to a simple economic formula, if the bank credit in the economy is low, it emphatically points towards low bank deposits. With weak credit growth in West Bengal, bank deposits during this two-year period too showed extreme slow growth.

To put the stagnation of bank deposits in numbers when deposits expanded by 19.8 per cent across the country, West Bengal’s deposits grew by 14.1 per cent.

But Trinamool’s leader Derek O’ Brien is on the contrary, of the grandiloquent opinion that “Modi Shah and their Tourist gang” can’t compete with them on real parameters of good governance and genuine development. One area where Trinamool could have beaten the Modi-Shah Duo was the contentious topic of unemployment.

But CMIE data, released in February 2021, on the contrary shows Trinamool’s inefficiency and inability to keep up with its opinion of good governance and real development. Reportedly, the unemployment rate in the state stood at 6.2 per cent, which was better than the national 6.9 per cent but was much higher than that of many states. It was reported that the state stood at the 17th spot among 27 states.

On social and growth indicators, the state offers a blended outcome. Official information reveals that whereas the state’s spending on training and rural growth areas in 2019-20 was significantly above the nationwide common but allocation in direction of roads, wellbeing and agriculture sector are significantly low.

In West Bengal, agriculture witnessed a decline in its share in expenditure in the Financial year 2019-20. In reality, the share of agriculture spending in whole expenditure was the lowest in six years ending March 2020.

In 2019-20 West Bengal had allocated 5.1% of the total expenditure  on agriculture. Considering the statistics, the allocation is considerably low as common allocation stands at 7%. Additionally expenditure on infrastructure was lowest in 5 years.

In the area of capital expenditure, between 2016-17 and 2018-19, capital expenditure as a share of whole expenditure rose steadily in the state from 7.96 per cent in 2016-17, to 12.18 per cent in 2018-19. However, it fell sharply to 8.43 per cent in 2019-20.

Speaking of corruption allegations, the state authorities have been accused of not implementing Central schemes together with PM Svanidhi Yojana, Ayushman Bharat and PM KISAN Samman Nidhi Scheme.

On MSMEs, a vital indicator of  employment and local industry, there are glaring gaps in West Bengal. As per the 73rd round survey by NSS, the state reportedly had 88.67 lakh MSMEs as of 2015-16, second only to Uttar Pradesh. These MSMEs had been reported to have employed around 1.35 crore individuals.

But according to the revised analysis by the MSME Udyam registration process – under the Ministry of MSME – until December 31, 2020, West Bengal does not appear anywhere in the list of top 10 states.

About the author

Shivani Khanna

A woman who believes in equal rights and aspires to inspire people through her writings. I aspire to contribute to the economic world and society with diligence and thus being an economic advisor tops my career ambitions . I currently am pursuing Economic honours ( at undergrad level) from delhi university.

Reach out to The Indian Wire!

Want to work with us? Looking to share some feedback or suggestion? Have a business opportunity to discuss?

You can reach out to us at [email protected]

Like us on Facebook!