State of the West Bengal Economy

The Economic Survey tabled by the union finance ministry in January 2018 had excluded the net state domestic product (NSDP) data of West Bengal, noting that the estimates for the new series with base year 2011–12 compiled by the Department of Planning, Statistics and Programme Monitoring, Government of West Bengal, “are under examination.” Yet, the controversy did not stop the state’s finance minister from making unsupported claims in his budget speech delivered in the state ­assembly on 31 January 2018. The minister claimed that the West Bengal economy had emerged as the “fourth largest state economy” in the country and took credit for increased revenue mobilisation and capital expenditure in the state. Other such assertions made by him consisted of: (i) increase in average annual farm income in the state from ₹91,000 per annum in 2011 to ₹2,39,000 per ­annum in 2016–17; (ii) highest rise in credit flow to the micro, small and medium enterprise (MSME) sector accruing to West Bengal among all Indian states, with the amount reaching over ₹1.2 lakh crore in the last five years; (iii) “negotiation” of investment proposals worth over ₹2.19 lakh crore (with employment prospects of 20 lakh) in the Bengal Global Business Summit, 2018. The 2017 budget, too, had mentioned investment proposals for ₹2.35 lakh crore in sectors like urban development, infrastructure, information technology, manufacturing, etc.

However, subsequent examination of the state’s output and income data by the Central Statistics Office (CSO) has led to significant downward revisions in the gross state domestic product (GSDP) estimates.¹ The present article looks at the implications of the data revision and scrutinises the accuracy and credibility of the assertions made by the West Bengal finance minister, on the basis of available official estimates.