Economic Growth in West Bengal
March 11, 2005
The Nobel Laureate VS Naipaul recently passed judgment that "Bengal was the economic and intellectual leader of India till it discovered Marxism. It discovered Marxism and like poor Russia in 1917, committed suicide. The economic lead of Bengal has vanished and so has the cultural lead." (See The Hindu of February 26). While cultural development cannot be quantified, economic growth can be and the evidence before us suggests that Sir Vidia's opinion takes more than just poetic license with the facts. The facts are that after 1993-94 West Bengal has the second highest growth rate with 7.2% with only Karnataka (8.1%) ahead of it. It would also seem that the Marxist rate of growth has been better than the Hindu rate of growth since India only grew at 6.3% during this period?
Naipaul was speaking at the India Today Conclave on "India Tomorrow: Perception versus Reality" and not surprisingly, given his star value, his opinions made big news the following day. More than that it reinforces a stereotype of how West Bengal has fared in the past two and a half decades under Communist rule. Quite apparently the gap between perception and reality is so vast that neither Naipaul nor India Today have been able to bridge it with truth. India Today had earlier awarded Punjab the prize of being the "best-managed state in India", when its decadal growth was just 3.8%, just ahead of India's lowest performer Madhya Pradesh (2.9%).
The second part of Naipaul's comment is even more absurd. Unlike in China, which can have a unique arrangement of One State-Two Systems, meaning communism in Mainland China and the familiar unbridled capitalism in Hong Kong, India's constitutional arrangements allow no such flexibility. Irrespective of which party governs a State, such as West Bengal, the system that prevails all over is what is constitutionally mandated. West Bengal's dominant political parties since 1977 may be Communist, but the country's chosen political system affords no possibility for a dictatorship of the proletariat. And for that matter any other dictatorship. Admittedly there is a somewhat greater flexibility in choice of economic system, but even this is circumscribed by constitutionally guaranteed freedoms and the rule of law.
Even so if Marxism did in fact influence our economic regime, then it applied equally to all of India and to single out West Bengal as its only laboratory would be wrong. Since 1992 we have even had a more "liberal" dispensation, after the so-called economic reforms ushered in by the Congress government of the late PV Narasimha Rao. Quite ironically it is during this period that West Bengal has leapt ahead of the other states in terms of pace of economic growth.
Even in terms of growth of per capita income West Bengal has fared much better than all other states during the post reforms era. It achieved an average growth of 5.5% after 1993-94 as opposed to the nationwide growth of 4.3%. This is even more revealing when you consider that during this period West Bengal was also racking up an average annual population growth of 1.78% between 1991-2001, which is much higher than the rate of the high achievers like Tamil Nadu (1.11%). If one were to consider the population growth since 1981, West Bengal grew at 2.34%, which is uncomfortably close to the national average of 2.51%. Undoubtedly the seemingly uncontrollable and unabated migration from Bangladesh has contributed to this relatively high growth of population. Whatever are the reasons for this we can only surmise that the rise in par capita incomes would have been even higher if there was no influx from the neighboring countries like Nepal and Bangladesh, and even neighboring states like Bihar and Orissa?
Even more interesting is the fact that per capita incomes of West Bengal and Maharashtra, after excluding the two great metros of Mumbai and Kolkata are fairly close. West Bengal's per capita after excluding Kolkata is Rs. 12,671 while Maharashtra's without Mumbai is Rs.13, 897. Thus, even if we accept for a moment that VS Naipaul is correct in assuming that West Bengal has a Marxist system, its performance is not too bad compared to what then must be the most laissez-faire of our states - Maharashtra. We can be certain that if the per capita incomes of other two big cities of Maharashtra - Pune and Nagpur - are excluded, the state's per capita income will be below that of West Bengal. Unfortunately Naipaul's moving mouth having spoken will move on while the words will linger on.
This performance is quite extraordinary when you factor in the dominant reality of rural West Bengal in that it ranks third from the bottom in terms of irrigated acreage with only 28.1% of its agricultural land irrigated. This is when it is the third most densely agricultural state in India with almost 77% of its land area under the plough. If like Punjab or Haryana with 89.72% and 65.0% respectively of agricultural acreage irrigated, West Bengal too were to benefit from centrally financed irrigation and centrally subsidized procurement, it would be fair to assume that its economic performance would have been even of a higher order. Then even without a communist system, the communist regime in West Bengal would have perhaps had a sustained growth rate closer to that of China?
The relationship between irrigation and agricultural productivity and growth is a well-known one and needs no elaboration here. Despite the low intensity of irrigation West Bengal has the third highest average yield in India, which at 2424 kgs per h.a. is substantially higher than the national average of 1739. This is no flash in the pan either for this was the ranking in 1991 also. It is clear that Naipaul's assertion "the economic lead of Bengal has vanished" is without any sound basis. But Naipaul, like all winter season NRI intellectuals, gets good press in India and his words become gospel to many who matter.
Not only does West Bengal's agriculture have a high level of productivity, its volume of foodgrains production places it third after UP and Punjab. UP with 120.12 lakh h.a. under irrigation, which corresponds to 60.06% of the total agricultural acreage, produces 43.20 mn. tonnes of foodgrains. This low productivity of cereals is possibly because of the 20 lakh h.a. of prime irrigated land concentrated in Western UP and the Terai region under sugarcane cultivation, which produced 116.22 mn. tonnes of sugarcane in 2001-02. Punjab, which is mostly a cereal producer, delivers 24.89 mn. tonnes from its 38.47 lakh h.a. of irrigated land, whereas West Bengal manages to produce 16.50 mn. tonnes of foodgrains from 19.11 lakh h.a. of irrigated land. The question then is whether West Bengal can do better? Of course it can, but that would require much larger investment in irrigation, but the size of the outlay does depend on Central Government attitudes and perceptions. We have much evidence that the Central Government is not equally benevolent to all the states and the eastern region has suffered much due to this.
The true significance of the West Bengal performance in Agriculture comes out vividly when we see the pattern of distribution of operational land holdings in that state. In 1991-92, the last time when such data was collated, 80.69% of all farmers in West Bengal were marginal farmers accounting for 39.98% of the total acreage. The corresponding figures for India were 62.79% and 15.60% respectively. While there were no large landowners in West Bengal, 1.33% of Indian landowners accounting for 15.20% of the acreage were large landowners. Two facts emerge from this. Land reforms were taken to their logical end and that the relatively high productivity was despite the preponderance of marginal sized holdings.
Compared to this, in Punjab marginal farmers owned only 6.20% of the acreage while large farmers owned 15.79% of the acreage. Likewise in Maharashtra it was 6.66% of the acreage with small farmers and 20.31% with large farmers. The only other state where land reforms seem to have been concluded as intended is Kerala. Apart from this the West Bengal government has so far distributed over 13 lakh acres of agricultural land vested in the government among the rural poor and landless. This accounts for almost 35% of the 45 lakh acres that has been distributed nationally. When you relate this to the fact that West Bengal accounts for only 3.5% of India's landmass, this is indeed a significant achievement.
Somebody should tell Sir VS Naipaul passing judgment on economic performance is not quite the same as writing "A House for Mr. Biswas". The former requires facts. The latter requires imagination. Clearly Naipaul should stick to what he is more proficient at.