The long-drawn ongoing assembly elections in West Bengal close amidst the alarming nationwide surge in Covid-19 cases. In about a week, we will find out whether the ruling Trinamool Congress can hold on to power for another five years, or the BJP will pull off a surprise, or the Left Front, now in an alliance with their erstwhile main rival, the Congress, will recover even some of the ground they have dramatically lost.
Electoral campaigns have revolved around the record of the ruling Trinamool, which has now governed for a decade. The BJP is running on the electoral plank of “real change,” promising growth and jobs, while the Trinamool is pushing back with its record of setting up various welfare schemes; the Left Alliance has been highlighting the economic hardships faced by ordinary citizens, especially the poor. Given that 72% of people in the state live in rural areas, what is happening to the economy of rural Bengal could play a major role in the electoral outcome. With this in mind, let us briefly review West Bengal’s economic performance over the last few decades based on official data reported in various RBI handbooks – both over time and relative to India – with special focus on the rural sector.
As is well known, until the early 1960s, West Bengal’s per capita income was higher than the national average. In fact, it was among the three richest states – the other two being Maharashtra and Gujarat. By the early 1980s, its per capita income was just about equal to the national average. In the early 1990s, when the country was poised to move to a higher growth trajectory, the rank of West Bengal fell to seven. In 2000, it fell further to 10, and in 2011, when a new government came to power promising change, its rank was 11. After a decade under the new regime, the slide has continued – its rank now stands at 14.
Clearly, this long-term snapshot of the state falling behind in economic terms, relative to the rest of the country over the decades, reflects an overall growth trajectory that has not kept up with the national average. And indeed, the marginal decline in its rank over the last decade relative to the previous one shows that there has not been any paribartan or change in this respect. However, if we take a more granular view of the growth process in West Bengal, some interesting features begin to emerge.
To begin with, West Bengal has performed better in agricultural growth over the last decade compared to the rest of the country. And in this respect, its record is better than the decade before. Even though its share of agriculture and related activities is comparable to and slightly higher than the nationwide average, the growth rate of agriculture in West Bengal has been 3.3% over the last decade (2011-12 to 2019-20), while that of India has been 1.6%. This seems to be largely driven by the fall in the growth rate of agriculture in the country over the last five years, because if we just look at the first five years of the last decade, the all-India agricultural growth rate was higher than that of West Bengal. Interestingly, during the earlier decade (1999-2000 to 2009-2010), when the state was still under the rule of the Left Front, the state’s growth rate in agriculture was very similar to (though marginally higher than) that of the country, while its overall growth rate was lower than that the national average. Of course, West Bengal’s higher growth rate in agriculture in the last decade implies that the growth rate of manufacturing as well as services in the state were lower than the countrywide average, given that the overall growth rate was lower in the state (4.2%) relative to the rest of the country (5.2%).
This basic aspect of West Bengal’s growth performance shows up in some other statistics as well. While the overall rural unemployment rate went up in West Bengal and nationwide between 2011-12 and 2018-19, the extent of the overall increase for India (1.7% to 5%) was much higher than the rise in the state (2.7% to 3.5%). Noticeably, however, the rural female unemployment rate went down in the state (2.4% to 1.4%) while it went up in the country as a whole (1.7% to 3.5%) over the same period.
Now, given how state and national income statistics are estimated, we do not get a very reliable picture of what is happening in the informal economy. For this reason, data on consumer expenditure, based on household surveys, provide a valuable glimpse into what is happening to living standards. Earlier, the National Sample Survey Organization (NSSO) used to publish periodic reports on monthly per capita expenditure in rural and urban areas. Unfortunately, the report from the latest round (2017-18) was released, but later withdrawn. Still, comparing the numbers from this round with the previous round (2011-12) offers some interesting insights. After adjusting for inflation, the rate of growth of per capita consumption expenditure in urban areas in the state (3.8%) over the last decade fell short of that of the country as a whole (4.7%). However, for rural areas, the pattern reverses itself – over the last decade, West Bengal’s growth rate shot up to 5%, well above the national average of 3%. This is also reflected in calculations that show that the percentage of people below the poverty line went down from 20% in 2011-12 to 14% in 2017-18 in West Bengal, while in the country as a whole it went up marginally from 22% to 23%. These numbers are consistent with the higher rate of agricultural growth in the state that we mentioned earlier.
There are many things in the electoral mix, from the various transfer programmes of the state government to perceptions of corruption, mismanagement, and political repression against the current regime as well as social issues based on caste, religion, and immigration. The chaos and misery unleashed up by Covid-19, as well as Cyclone Amphan, all in the last twelve months, have introduced a degree of unpredictability. However, the fact that the rural economy in the state over the last decade has outperformed the national average, a fact that has almost gone unnoticed, might end up playing an important role.
(Maitreesh Ghatak is Professor of Economics at the London School of Economics and an elected Fellow of the British Academy.)
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