Roadmaps for Bengal’s re-industrilasation being chalked out

With the Bharatiya Janata Party (BJP) preparing to assume office in Kolkata after its stunning victory in West Bengal, New Delhi has quietly begun work on what could become the most ambitious economic restructuring exercise attempted in eastern India in recent times.

According to officials familiar with the discussions, central ministries and the NITI Aayog have been asked to work on a long term blueprint aimed at industrial and economic rejuvenation of West Bengal, a state that once served as the commercial nerve centre of the sub-continent but whose industrial prominence steadily eroded since the 1970s.

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Interestingly, Ashok Lahiri, well-known economist and former finance ministry top official who was not fielded this time round in the Bengal assembly elections despite winning by a convincing margin from Balurghat in 2021, is set to take charge at Niti Aayog.

Officials said preliminary consultations on the contours of a possible “re-industrialisation roadmap” for Bengal, with emphasis on manufacturing revival, logistics, urban infrastructure, riverine trade, and employment generation, has already started.

“There is a myth that people in Bengal run after jobs … but people forget that this is the land of entreprenuers from Sir RN Mookerjee of Martin & Burn fame to Sir PC Roy of Bengal Chemicals to Ghanshyam Das Birla … we want to revive that. After all Kolkata is the natural hub for our Act East policy and trade with Southeast Asia and East Asia,” said Sishir Bajoria, leading Kolkata-based industrialist and senior BJP functionary.

Bengal which was the second richest state in terms of GDP at India’s independence has slipped since to the sixth place accounting for USD 221 billion or so. Kolkata was once the headquarters of India’s mercantile capitalism, home to jute mills, engineering firms, tea auctions, thriving river ports and financial institutions that connected eastern India to global trade routes.

However, the rise of ultra-left Marxist urban militancy, hard-line labour unions and political instability led to capital flight, and eventually an all- round economic decline gradually weakened the state’s industrial base.

“Even after the liberalisation era transformed western and southern India, Bengal struggled to attract large scale manufacturing investment. High profile land conflicts in Singur and Nandigram during the 21st century deepened investor anxieties, while successive governments increasingly shifted towards welfare driven politics rather than structural industrial expansion,” Bajoria pointed out.

One of only two bright spots lay in the tech and services sector which saw a boom of sorts with new firms flocking into Kolkata’s IT hub in Salt Lake city and New Town, attracted by an abundance of computing power, low rentals and a city with a thriving social life.

“The other was the agricultural and agri-based in dustrial sector. The growth rate here has been very high at 8-10 per cent and developments here will ensure farmer incomes rise and out-migration from Bengal dwindles. Horticulture, new kinds of teas, processed cheese of the kind produced at Bandel are among areas which can be thought of to boost exports,” pointed out Prof Biswajit Dhar, former WTO Chair at the Indian Institute of Foreign Trade.

Top officials involved in the present exercise say the proposed blueprint may focus on a few broad sectors. The first is logistics and connectivity. Bengal’s strategic geography, connecting India to Bangladesh, Nepal, Bhutan and Southeast Asia, is increasingly viewed as an underutilised economic asset. Policymakers are examining expansion of port linked infrastructure, freight corridors and multimodal transport networks anchored around Kolkata and Haldia.

The second area is manufacturing clusters. There is renewed interest in reviving engineering, chemicals, foundries, textiles and electronics assembly through special industrial zones and tax linked incentives. Some policymakers are also advocating a semiconductor and electronics ancillary corridor linked to eastern India’s mineral belt.

Bengal’s proximity to coal and iron ore bearing regions, its access to ports and its position near the Bay of Bengal energy routes are viewed as potential advantages for downstream industries and energy intensive manufacturing and this certainly will be a third pillar, said officials.

Finally, there is likely to be a major push on skills and employment generation, particularly for young Bengalis who have increasingly migrated to southern and western India in search of work.

However economists warn that West Bengal continues to face high land acquisition sensitivities, ageing industrial infrastructure, weak municipal finances and bureaucratic inertia. Investor confidence, though improved after the election outcome, will depend heavily on policy roadmaps and administrative execution.

“Moreover, reindustrialisation in the twenty first century is no longer merely about reopening factories. It requires integration into global supply chains, technological adaptation, financial depth and regulatory credibility, areas where Bengal will have to compete with more established manufacturing states such as Gujarat, Maharashtra, Tamil Nadu and Karnataka,” said Prof Dhar.