Fighting Neoliberalism: Does West Bengal Show the Way?

July 17, 2008

By Dipankar Basu, Sanhati. Open for comments.

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Mindless economic growth through unfettered operations of the “free” market, that is often portrayed in the mainstream media as a panacea for all of India’s economic problems, has now been shown to be seriously flawed as a sensible strategy for economic development.

Active, pro-people state intervention through sound policies is essential for making any meaningful dent on the problems facing our country today; and this includes, if historical experience is anything to go by, even the achievement of sustainable, broad-based economic growth. In every known case of successful industrialization and economic development, be it England or Continental Europe or USA or Japan or the East Asian tigers, the State has played a pro-active role in directing investments, mobilizing resources to finance that investment, protecting fledgling industries from undue competition from abroad, and so on; it is, therefore, inconceivable that any state, or the country for that matter, can make that transition without State intervention through effective policies for agriculture and industry. State governments subscribing to this viewpoint would claim to have put this political philosophy into practice, especially the one in West Bengal.

Thus, analysts sympathetic to the CPI(M)-led Left Front Government would have us believe that the state government has indeed played, and continues to play, such a pro-active and beneficial role. As proof of this claim they point to the putative “spurt in economic growth” that West Bengal has seen over the last two decades of the 20th century. For instance, in an article in the website Pragoti [1], Jayati Ghosh (JG henceforth) claims that “over the 1990s West Bengal was one of the fastest growing states in India” if this growth is measured in terms of State Domestic Product. “This tendency was even more marked in per capita terms,” claims JG, “because West Bengal has been successful in controlling fertility to a greater extent than many other states.” This spurt in economic growth, moreover, comes in the backdrop of the fact that for the past three decades “West Bengal has been among the middle ranking states of India, in terms of both per capita income and human development indicators.”

Before we look at the evidence to evaluate these claims, let me briefly point to the interesting history of this article by JG. On May 20, 2008 this article was (for the first time presumably) posted on Pragoti [2] and was also published in the Hindu Business Line [3],the first one authored by JG and the one in the Business Line by C P Chandrasekhar (CPC) and Jayati Ghosh (JG). Exactly three weeks later, on June 10, 2008, essentially the same article was published again simultaneously in the Hindu Business Line [4] and in Pragoti [5]. Two days later, the same article was posted on Macroscan [6].

What was the need to recycle this article after three weeks? Let us hazard a guess. Polling in the Panchayat elections in West Bengal finished on May 17, and counting started on May 20; the first showing of the article, therefore, seems to have been pre-emptive in purpose. No matter what the election results, supporters could find solace in the “spurt of growth” in West Bengal that JG had detected in the data. The second time round, it seems to have been more of a damage control exercise; hence the frantic recycling, and even in the same website and newspaper to boot! Probably supporters and sympathizers of the Left Front Government needed to be reassured that despite Singur, despite Nandigram, despite the verdict in the Panchayat elections, all was well with the social democratic left; after all the magic of growth was on its side, or so JG would have us believe.

Before we turn to the evidence, let us remind ourselves about JG’s claims: first, she claims that West Bengal has seen relatively higher growth rates in per capita income; second, she claims that West Bengal has been a middle ranking state with regard to per capita income for the last three decades; third, she claims that West Bengal has also been a middle ranking state with regard to indicators of human development. The first claim, of course, is related to the other two. If West Bengal has seen relatively higher growth rates, then its relative position must have improved, both with respect to per capita income and human development indicators; the first simply by the logic growth rates, and the second because of higher growth rates coupled with a supposedly “pro-people” government. In what follows, we will evaluate each of the three claims, taking them one at a time.

Comparative Growth Rates of Per Capita Income

JG claims that West Bengal has been one of the fastest growing states in India over the 1990s if we look at the growth of State Domestic Product [7] (SDP); the growth in per capita SDP is even more pronounced because, according to JG, West Bengal has managed to reduce its population growth rates much better than many other states. She mentions a fact which has been repeated very often: West Bengal has had the highest growth in SDP in the 1990s among major Indian states, second only to Karnataka. For instance, this fact was mentioned in an article in August 2004 by Manas Chakravarty [8]; it was later used by Mohan Guruswamy [9] to take V S Naipaul rightly to task; now JG has repeated that fact: “…it is not generally known that over the 1990s West Bengal was one of the fastest growing states in India, and actually showed the second highest rate of aggregate State Domestic Product growth among major states, after Karnataka.”

But this should hardly be celebrated. From the perspective of economic growth, it makes little sense to look at the growth rate of SDP per se; what is important is to see how that growth rate has moved in comparison to the growth rate of the population. Since this should be an obvious proposition, it is not clear why the growth rate of the SDP is used so often by economists and analysts. Even JG realizes this. For, in the very next sentence she moves to the per capita SDP: “This tendency [for growth] was even more marked in per capita terms, because West Bengal has been successful in controlling fertility to a greater extent than many other states.”

Since it clearly makes more sense to study the evolution of the per capita SDP, we will not waste any space talking about the growth rate of the SDP; we will only look at the per capita SDP. In Table 1.1, we present the average annual compound growth rates of the per capita SDP (at current prices) for all the states in India for various periods starting in 1990; the starting point of 1990 is chosen because JG’s claim about growth rates relates specifically to the 1990s.

What does the evidence on comparative growth rates tell us? That West Bengal was not one of the fastest growing states (among the major states) in India during the 1990s. All entries highlighted in blue in Table 1.1 are growth rates of per capita SDP which are higher than that recorded by West Bengal. In the period 1993 to 2003, there were five states which grew faster than West Bengal: Chandigarh, Goa, Himachal Pradesh, Kerala and Tripura [10]. Between 1993 and 2000, there were again five states that grew faster than West Bengal: Goa, Himachal Pradesh, Kerala, Pondicherry and Tripura. If, on the other hand, we look at the decade of the 1990s, the period to which JG’s claim specifically relates, we see that eleven states grew at a faster rate than West Bengal between 1990 and 2000: Andaman & Nicobar, Andhra Pradesh, Delhi, Himachal Pradesh, Karnataka, Kerala, Mizoram, Nagaland, Pondicherry, Tamil Nadu and Tripura. So, what should we make of JG’s claim that “over the 1990s West Bengal was one of the fastest growing states in India”? We will leave this task to the readers [11], but JG should take some consolation from the fact that two of the faster growing states, Kerala and Tripura, have been ruled off and on by CPI(M)-led governments.

Before moving on, let us note in passing that JG’s claim about West Bengal’s fertility transition is at best partially valid; there were many states that managed to control aggregate fertility better than West Bengal. In Table 1.2, we give the average annual growth rates of the populations of the Indian states for each decade since 1951. If we restrict ourselves to the decade of the 1980s and 1990s, we see two things: one, West Bengal had lower rates of population growth than the Indian average; two, there were several major states that outperformed West Bengal in this regard: Andhra Pradesh, Tamil Nadu, Karnataka, Orissa, Kerala, Himachal Pradesh, Goa [12].

Comparative Levels of Per Capita Income

After comparing the growth rates of the per capita SDP, let us now turn to the levels. If, as JG claims, West Bengal has witnessed one of the fastest growth rates among major Indian states over the 1990s, then the position of West Bengal relative to other states must have improved remarkably. To evaluate this claim, we will again turn to the evidence. In Table 2, we present the relative rankings of the Indian states in decreasing order for the period 1993-94 to 2004-05; this particular period has been chosen because the latest Economic Survey, i.e., 2007-08, provides consistent data for this particular period. For each year, states have been ranked by the level of the per capita SDP for that year; states which appear higher in any column have higher values of per capita SDP than all the states appearing below them. What story does Table 2 tell?

West Bengal began the period with rank 21 among 32 states; in the next five years it climbed to a rank of 16 and then slipped back to a rank of 18 at the end of the period. This hardly corroborates the picture painted by JG of steady growth and outpacing of other Indian states. Over the period under consideration, West Bengal moved up by merely 3 positions. Was this the best performance among all the Indian states during this period? Look once again at Table 2: Andhra Pradesh moved up 3 positions; Karnataka moved up 4 positions; Himachal Pradesh moved up 8 positions; Tripura moved up 13 positions.

But the interesting part of the story is that, like all social democratic pronouncements, even this partially favorable picture is only a half truth. Let us go back a decade and see how West Bengal has fared compared to the other states in terms of economic growth over roughly the period of the Left Front government’s tenure in office. Table 3 gives analogous rankings of Indian states for the period 1980 to 2004-05. For comparability with later periods, we have left out the newly created states (Chhattisgarh, Jharkhand, and Uttaranchal) as well as Chandigarh (for lack of data) from this comparison.

Why does it make sense to go back a decade and start at 1980? This is simply because of the fact that the Left Front Government came to power in 1977 and “made West Bengal the most active state in respect of land reform, leading the rest of the country not only in recording and legal recognition of the rights of sharecroppers but also in enforcing land ceilings and distributing surplus and vested land”. According to JG, this contributed to breaking the “agrarian impasse” and lifting the growth rate of the state. Recall, at this point, that several commentators sympathetic to the Left Front Government have, time and again, claimed that the 1980s was a period of massive growth – led by agricultural growth – for West Bengal; going by these pronouncements, West Bengal outpaced most other states during this period of “pro-people” governance. Hence, it makes sense to compare this period with the growth experience of other states which was not fortunate enough to have had the benefit of the “pro-people” government.

So, what story does Table 3 tell us? The evidence flies in the face of all such claims made by the sympathizers of the Left Front Government. West Bengal started the period in 1980-81 with a rank of 10 among 28 states, a good rank by all means; at the end of the decade, it had slipped down four rungs to end up with a rank of 14 among 28 states. Thus, during the decade of the 1980s it fell from being a relatively high income state to a position roughly in the middle. In the next five years, it slipped down even further to a rank of 18. At the end of the period in 2004-05, it has ended with a rank of 17, way below where it started in 1980-81. From a relatively high income state, West Bengal has become a relatively low income state during the last three decades. So what shall we make of JG’s claim that for the past three decades “West Bengal has been among the middle ranking states of India, in terms of both per capita income and human development indicators.” The reader, as before, must draw the appropriate conclusion.

Human Development Indicators

Let us now turn to some of the commonly used indicators of social well-being, what JG calls human development indicators, and see how West Bengal has fared in comparison to the other states in India. We will look at the following indicators: life expectancy at birth, the infant mortality rate (per 1000 live births), the literacy rates and access to safe drinking water; the first two give an indication of the health status of the population, the next looks at the educational status while the last gives an indication of the availability of a very basic infrastructure necessary for a decent living.

Life expectancy at birth is a measure of the average life span of the population under question. The infant mortality rate (IMR) is the number of newborn babies that die within a year of birth per 1000 live births; both, it is obvious, give some indication of the health status of the population. Table 6 gives the life expectancy at birth and the IMR for the major Indian states. The life expectancy figures are for the period 2001-05 and the IMR figures are roughly for the period 2006.

The average life span of an average person residing in West Bengal around the beginning of this century was marginally higher than an average citizen of India. For the total population, the average life expectancy at birth was 63.2 for India while it was 64.6 for West Bengal. Among the 15 major Indian states listed in Table 6, six had a higher life expectancy at birth than West Bengal.

The probability of a child dying during the first year of its life was substantially lower in West Bengal than for the country as a whole, as shown in Table 6. The IMR for the total population in India was 57 (per 1000 live births) while it was only 38 (per live birth) in West Bengal. Only three states, Kerala, Tamil Nadu and Maharashtra, among the 15 major states listed in Table 6 had better scores than West Bengal in this regard. But this relatively superior performance with regard to infant mortality hides some deep problems. To see this look at the more detailed data on IMR presented in Table 7.

Table 7 presents data on the IMR for all the Indian states for two points in time, 1961 and 2001, to compare it’s evolution through the decades. These time points were chosen because data for these were available in the latest Economic Survey of India (2007-08). The last three columns give an idea of the improvement of the IMR over this four decade period; it is the percentage decrease in the IMR between 1961 and 2001. For the country as a whole the IMR decreased by around 102 percent, while the corresponding figure for West Bengal was 150 percent. But this overall high performance hides the abysmal performance with respect to the IMR of female children. For female children, whereas the country improved the IMR score by about 83 percent, West Bengal improved it only by about half of that: 42.5 percent. In this respect, West Bengal was the worst performer among all the Indian states barring one! Is this indicating a hidden male preference in West Bengal?

In government statistics – which is what we are using – access to safe water is defined simply as the availability of a tap or a hand-pump or a tube-well for a household; by all reckoning, this is a very basic and essential infrastructure for modern-day living. Table 8 gives the proportion of households in a state that have access to safe drinking water, along with the growth rate of that proportion over the last two decades. Whereas for India, only 78 percent of households had access to safe drinking water in 2001, about 89 percent of West Bengal households had that access; but this is largely the result of starting at a higher level. In 1981, only 38 percent of Indian households had access to safe drinking water while the corresponding figure for West Bengal was 70 percent. Thus, in terms of increasing the reach of safe drinking water to excluded households, West Bengal has fared much worse than the country as a whole.

But how has it performed in comparison to other states with regard to providing access to safe drinking water to the general population? Table 8 provides information to answer that question. In Table 9, we have ranked the Indian states in decreasing order according to the proportion of households (in the state) with access to safe drinking water (as defined above); a state which appears higher up in the list had a higher proportion of its households with access to safe drinking water. Among the 28 states listed in Table 8, West Bengal had a rank of 5 in 1981, a high rank by all means; in 1991, the rank remained unchanged, and in 2001, West Bengal’s rank declined to 6. Thus, compared to other Indian states, West Bengal’s performance with regard to providing access to safe drinking water to households was that of a laggard.

Last but certainly not the least, we turn to a measure of the educational attainment of the population: the literacy rate. The literacy rate is, roughly, the proportion of the population with basic reading and writing skills; it would be part of what nowadays is called `human capital’ by mainstream economists. Table 10 gives state-wise figures for the literacy rate from 1951 to 2001; the entries refer to the proportion of the population considered literate. It can be seen from Table 10, that West Bengal’s literacy rate in 2001 was nearly equal to the country’s average; in this respect West Bengal has been a middling state. But if we look at the growth rate of literacy we see that West Bengal has been a laggard. While for the country as a whole, the literacy rate increased by 49 percent between 1981 and 2001, for West Bengal it increased by only 41 percent during the corresponding period. Compared to other states, West Bengal’s rank fell, as can be seen from Table 11.

Concluding Remarks

In summary, we should note the following: West Bengal was not one of the fastest growing states once we consider per capita SDP instead of SDP; over the period from the 1980s onwards, West Bengal’s relative ranking in terms of per capita SDP has fallen significantly; in terms of several human development indicators, West Bengal has been losing ground in comparison to other states as well. Broadly, it seems to be the case that whereas West Bengal started the decade of the 1980s as a relatively high income Indian state, it has fallen to the rank of a lower-middle income state over the next two decades, precisely when it was being steered by the CPI(M)-led Left Front Government. So, it seems that JG’s claim about the “spurt in economic growth” in West Bengal is really a figment of her imagination with very tenuous links to reality. But more problematic than the parading of these half-truths is the accompanying blindness of the likes of JG to the increasingly pronounced anti-people character of the CPI(M)-led Left Front Government in West Bengal.

What they fail, or are unwilling, to see is, in fact that whatever land reforms and progressive legislation was enacted in West Bengal, though beneficial, was extremely limited in scope [13]. It left the bottom rung of rural society – the landless laborers and the poor peasants – completely untouched and replaced the landlords with the rich and middle peasants as the new ruling class. Since the growth of the ‘internal market’ was thereby rather limited, the boost to economic growth was equally feeble. Neither did the state government take much pro-active steps to channelize the economic surplus into productive investments or take the land reforms to the next step of collective, cooperative farming. Though it made some efforts at state action on the input side of agricultural production, it completely failed to make any inroads on the output side; the result was the continued domination of monopolies and, as a result, wastage of a considerable part of the economic surplus. In fact, come the 1990s, just like any other state in the grip of neoliberal ideology, it has gradually whittled down public investment in rural infrastructure, let the public distribution system go to the dogs, let the public irrigation system lose its efficacy, let rural moneylenders make an ignominious comeback; instead of working out and implementing pro-people policies, the party behind the State, has spent most of its efforts in ensuring, by hook and by crook, continuance in office. The result, in comparison to other states in India, is there for all to see. Holding up the performance of such a government as a shining example of fighting neoliberalism in practice is, therefore, digging one’s own political grave.

(I would like to thank Alita, Debarshi and Kuntala for helpful comments.)








7. The State Domestic Product (SDP) measures, roughly, the market value of all the final goods and services produced during any year in the state under consideration; to get the per capita SDP we divide the SDP by the population in that year.



10. The figures in Table 1.1 are the growth rates of the per capita SDP evaluated at current prices, i.e, the SDP figures have not been adjusted for inflation; that is why the growth rates are so high. If we assume that the average inflation rate was about 5 percent, then to get the growth rate of real per capita GDP we will have to deduct 5 from each entry in Table 1.1.

11. The basic data presented in Table 4 might have some issues with regard to comparability both across states and across time; I still use them because they, nonetheless, provide a good first approximation.

12. Many analysts, including leftwing economists, have pointed out that West Bengal data might be fudged; this is especially true about data relating to agricultural production an yield. An inflated agricultural production data also inflates figures on overall economic growth. I will not go into this issue here and instead assume that the data has not been manipulated; for reference on this issue see the article by Devadeep Purohit in The Telegraph on May 29, 2003.

13. For instance see, Basu, D. “The Political Economy of Middleness: Behind Violence in Rural West Bengal,”Economic and Political Weekly, Vol. XXXVi, No. 16. April 21, 2001.


3 Responses to “Fighting Neoliberalism: Does West Bengal Show the Way?”

  1. Suvrodip Says:
    July 22nd, 2008 at 07:53

    With utmost respect to your tremendous research,I would like to clarify a few things which I thought were relevant.Firstly, in most of your data,the states which have been mentioned to have faired better than Bengal include either Goa,Pondicherry,Andaman,HP,Mizoram,Nagaland (although in few cases there has been mention of bigger states as well),Tripura which are all very small states with respect to the population.As a laymen in economics I would like to know whether this comparison is at all valid when you wanna take per-capita SDP and nopt just SDP as the criteria.It’s important to know where Bengal stands in comparison to bigger states in terms of population.Also when you consider the per capita SDP index are you taking into consideration the population which migrates heavily from adjoining under developed states like Bihar,Orissa,Jharkhand etc.Doesn’t this factor automatically pulls down the per capita SDP of the state?
    Your comments on this will be highly solicited.

  2. Dipankar Says:
    July 23rd, 2008 at 18:57

    1. Since per capita SDP is total SDP divided by the population of the state, it gives us an idea about the total output of the state which is comparable across states; it is precisely with the per capita SDP that we can compare large and small states. Otherwise large states would always be ranked above smaller states, because they are larger in terms of population and can therefore produce more output compared to smaller states.

    As an example let us consider India and the US. India’s GDP in 2008 was $2.989 trillion in PPP terms, while USA had a GDP of $13.84 trillion again in PPP terms. Therefore it seems the USA is about 4 times richer than India. But is that correct?

    Look at the per capita GDP figures for 2008: India had $2700 while USA had $45800 (both in PPP terms). By this measure, USA is about 17 times richer than India.

    One reason India had a high GDP compared to USA was because it has a higher population. In 2008, India’s popualtion was 1,147,995,898 while the corresponding figure for USA was 303,824,646. Hence, India was about 4 times more populous than USA.

    That is why per capita GDP is a better measure to compare between countries. In a similar manner, per capita SDP is a better measure to compare between states.

    2. No, I do not take migration into account. If migration is taken into account that would probably push down West Bengal’s ranking even further. That is because most of the migrant population go to the high per capita SDP states like Delhi, Punjab, Haryana, Gujrat, Maharashta, etc. If we remove the migrant population from the calculation, then their per capita SDP would move up relative to West Bengal.

  3. Subhrajit Says:
    May 11th, 2009 at 07:07

    Quite a long time after the last comment!!

    Table 1.1 is really revealing. West Bengal is ahead of Gujarat and Maharashtra in all the periods of comparison. Proves that JG is right. (Who cares if we are lagging behind Nagaland, Mizoram, Goa, Andaman and Pondicherry?)

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