Post On > Sep 20 2021 5357
To those who have not seen West Bengal when it was still a formidable industrial power, the present status of the State economy does not provide a base from which a take-off or even recovery could be planned. But paradoxically, to those who have seen the State in its days of industrial glory, it is likely that the State’s past strengths would lead them to wrong take-off points.
This is because Bengal's former champion industries that have sunk to sickness do not provide a guide to where the future lies. Industries like engineering where the State had a considerable presence now have spread throughout the country and indeed the globe and there is no reason to assume that its revival in the State will be easy.
But as if to refute this line of reasoning, one could argue that jute, where the State is the largest producer (where India is the largest producer in the World), provides a ramp for a massive leap into re-industrialise. Jute, packaging material par excellence and with impeccable “green” credentials can be the State’s ticket to establishing a presence in the $ 205 Billion Indian packaging market which is set to grow by over 26% over the next five years.
This begs the question as to why this has not happened so far. The easiest answer is the image of the State in the minds of investors buttressed by data; the State’s rank when it comes to ease of doing business entered the top ten states only in 2019. The State’s home-grown entrepreneurial talent is practically invisible when it comes to industrialisation which indicates that the State is unlikely to be an autonomous growth pole capable of innovation. For some time, the fresh investment will be in the form of subsidiaries where innovation, if present, will be at the direction of the Company headquarters wherever it is located.
When it comes to existing industries, there is no compelling reason for such industries to relocate to West Bengal. But when it comes to industries of the future few know which are the ones.
Hence West Bengal, having damaged its industries, has a more difficult task. It must create a milieu where its engineers and doctors from engineering and medical colleges are encouraged to eschew the supposedly steady and safe path of working for others and instead strike out for themselves. In so doing West Bengal will be only embracing its past when, till the advent of East India Company, merchants of Bengal reigned dominated commerce in this part of the country.
That is why the State Government must lay the greatest stress on ease of doing business. It is vital that a generation, that does not have State-grown role models to follow, are encouraged to strike out on their own. The mentorship they may need may be provided by the State’s diaspora, which is active in the cutting-edge technologies/sectors of the world and is unlikely to come back if the business milieu is not up to it.
The State must position itself as a potential destination for Knowledge Process Outsourcing activities (which is considerably above Business Process Outsourcing in the technology) and the services Global Value Chain order, where companies worldwide purposefully allocate relatively high-level tasks involving specialized knowledge or problem-solving to an outside organization or third party. The State has the institutions and manpower to cater to such a sector and Kolkata as an affordable city with its hard and soft infrastructure can be matched by few other cities in India.
For this to occur, West Bengal’s Higher Educational Institutions will have to work outside their silos and make their systems into an open architecture that allows participation of knowledge workers in various fields, as envisaged by the National Education Policy 2020. Upgradation of knowledge and its seamless and logical integration with the knowledge economy makes it a requirement. Here the regulatory mindset that governs institutions is far more important than actual financial resource requirements. If Hyderabad and Gurgaon (which followed Bangalore in cornering a share of the IT and ITES business) can, there is no reason why Kolkata cannot. However, the State Government has to bring various stakeholders together on a common platform to chart a pathway to this end.
But IT and New Industries are by no means the only area where the State can generate income and employment. In fact, one of the silver linings in the State's otherwise grey picture has been the rise of tourism. While tourist arrivals have risen dramatically from 25.4 million to 92 million in the 2013-2019 period. But given its share of the population, the share of tourists is still below par especially compared to states like Tamil Nadu which if emulated could result in tourist arrivals jumping manifold. It must be remembered that the employment multiplier of tourism is the highest of all economic activities and is the perfect example of growth with jobs!
But for this to happen the State must embrace another aspect of its past ie its links with India’s ancient past. Ancient texts make it clear that West Bengal’s Gangasagar’s importance in India is on the far firmer ground than Tirupati. In fact, the shrine at Katra, Jammu and Kashmir is based on folklore. Thus tourist potential of Gangasagar should not be less than the 40 million visitors that Tirupati receives. Furthermore, there are several potential tourist circuits which with the State’s cultural heritage and ability to imbibe and incorporate other elements no longer inhibited by pretentious ideologies, can ensure that tourism can be employment creating money-spinner.
West Bengal can come back and do so with a bang. Its human and cultural resources combined with its heritage provide it with a ramp to do so. What is required is the milieu or environment which gives confidence to risk-takers. Once that confidence is induced, Bengal’s recovery and rise may be faster than what policymakers hope for.
*Dipankar Sengupta is Professor of Economics in University of Jammu. Views expressed are his own.
** Photo by Lars Kuczynski on Unsplash
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