West Bengal Industrial Decline: Sanand’s Triumph Over Singur

In 2008, Tata Motors chose Singur, West Bengal, as the site for its ambitious Nano car project, aiming to bring an affordable car to the masses. However, the project faced significant opposition led by Mamata Banerjee, who was then the opposition leader in West Bengal. Protests erupted over the use of fertile farmlands for industrial purposes, leading to the eventual relocation of the factory to Sanand, Gujarat. This incident, nearly 15 years ago, highlights the contrasting fates of the two regions and marks a significant point in the West Bengal industrial decline.

Today, the fields of Singur are once again being tilled for agriculture, while the Sanand plant is a bustling hub of automobile manufacturing, producing models like the Taisor and Tata Tiago EV. The factory has directly created 4,000 jobs and has spurred the growth of ancillary industries, further boosting local employment and entrepreneurship. Sanand’s victory has become a testament to Gujarat’s industrial prowess, with over ₹24,000 crore in investments and 400 companies setting up operations. The decline of West Bengal’s industry is starkly evident in this comparison.

The Rise and Fall of West Bengal

West Bengal, with its rich industrial history, was once a major economic hub. Kolkata, the capital, was India’s second-largest city in terms of GDP post-independence. However, the state has seen a decline in its industrial fortunes, a trend starkly highlighted by the Nano project debacle. According to recent NSO data, West Bengal has lost over 3 million informal jobs in the past seven years due to adverse political and policy environments, further contributing to the West Bengal industrial decline.

West Bengal’s geographical advantages are undeniable. The state connects India to the Northeast and serves as a gateway to Bhutan and Sikkim. It shares international borders with Nepal and Bangladesh and boasts significant natural resources, including coal fields in Raniganj, limestone, copper, dolomite, and granite. The long coastline along the Bay of Bengal, with major ports like Haldia, facilitates international trade. The fertile river valleys and a favorable monsoon make it agriculturally rich, particularly in jute and cotton production.

Historical Industrial Glory

Historically, Bengal was renowned for its textile industry, especially silk and jute, which were in high demand internationally. The region flourished under the Mughal Empire and later became an industrial powerhouse under British rule, with Kolkata emerging as the administrative and commercial capital of British India. The jute industry around the Hooghly River was the world’s largest, earning Bengal the nickname “Juteopolis.”

Post-independence, West Bengal continued to thrive industrially, with a well-developed infrastructure and skilled workforce. However, political instability, labor unrest, and the partition of Bengal began to disrupt economic activities. The state’s industrial decline accelerated in the late 1970s when the Communist Party came to power. Militant trade unionism, power shortages, and a lack of new investments led many industries to relocate to more stable environments.

Modern Challenges

West Bengal’s industrial decline is rooted in several factors. Political instability, beginning in the 1960s with the Naxalite movement and the rise of the Communist Party, led to widespread violence and economic disruption. Frequent strikes and militant trade unions during the 1970s to 1990s further hindered industrial output, leading to job losses and production declines.

Power shortages in the 1980s and 1990s severely impacted industrial production, with regular power cuts in industrial hubs like Howrah and Durgapur. This increased operational costs and forced many industries to leave the state. The Logistics Ease Across Different States (LEADS) 2023 report categorizes West Bengal as an “Aspirant” state, lagging behind achievers like Gujarat, Tamil Nadu, and Andhra Pradesh.

Bureaucratic inefficiency and red tape have also plagued West Bengal. The Tata Nano project faced significant delays and opposition, ultimately relocating to Gujarat. Such political and bureaucratic hurdles have made the state unattractive to new investments. Between 2011 and 2018, West Bengal attracted only 1.5% of India’s total foreign direct investment (FDI) inflows, compared to Maharashtra’s 30%.

The Path to Revival

Despite these challenges, West Bengal has the potential to revive its industrial sector. Significant investments in infrastructure development, including road, rail, and port connectivity, could reduce transportation costs and improve logistics, making the state more attractive to investors. Developing new industrial corridors, like the Kolkata-Delhi Freight Corridor, and upgrading existing ones can boost trade and industrial activities.

To compete with IT hubs like Bengaluru and Hyderabad, West Bengal should focus on expanding its IT and technology sectors by setting up more IT parks, providing incentives for tech startups, and investing in digital infrastructure. Additionally, promoting semi-manufacturing and food processing industries, given the state’s cheap labor and trade advantages, can drive economic growth.

Revitalizing traditional industries such as jute, tea, and textiles while promoting new manufacturing sectors is crucial. The state’s rich demographic advantage, with a large, diverse, and literate population, can contribute to a skilled labor pool, fostering innovation and research.

Conclusion

The contrasting fates of Singur and Sanand underscore the impact of political and policy environments on industrial growth. West Bengal’s decline from an industrial powerhouse to a state struggling with job losses and underdevelopment is a cautionary tale. However, with strategic investments and policy reforms, the state can reclaim its industrial glory.

What steps should West Bengal take to attract more foreign direct investment? Feel free to share your thoughts and comments below!