The great transformation

Published : Jun 09, 2001 00:00 IST

The improvement in industrial growth in the 1990s, aided by the sustained growth in agriculture, has made West Bengal one of the fastest growing States. But the road ahead is full of challenges.

IT is now widely recognised, even by critics of the Left Front and its government in West Bengal, that it has achieved a remarkable restructuring of the rural economy that has promoted both growth and equity. When the Left Front assumed office in 1977, it made land reforms a priority area. During the 24 years of Left Front rule, 13.69 lakh acres were taken over as ceiling-surplus lands. Of these, 10.48 lakh acres have already been distributed, benefiting about 25.48 lakh poor peasant and agricultural labour households, of whom 57 per cent belong to the Scheduled Castes and Scheduled Tribes. The number of beneficiaries of joint pattas in the State now exceed 4.31 lakhs, and pattas held by women alone exceed 51,000. The number of sharecroppers recorded is now 14.97 lakhs, while nearly 3 lakh poor persons have received homestead land. In effect, more than 50 per cent of rural households have benefited from the land reforms carried out by successive Left Front governments. Data from the National Sample Survey (NSS) show that although small and marginal farmers made up 85 per cent of all farmers in the country in 1992, they owned only 34.3 per cent of all the agricultural land. In West Bengal, by contrast, small and marginal farmers owned 70.7 per cent of the agricultural land.

The land reforms have enthused the peasantry and widened the base for growth of the rural economy. During the period between 1980-81 to 1999-2000, the annual rate of growth of foodgrains production in the State was 4.1 per cent as against an average of 2.5 per cent for all major States. Thanks to the efforts taken to improve irrigation with farmers' participation and other measures, the index of cropping intensity in the State has increased from 136 in 1980-81 to 180 in 1999-2000, second only to Punjab. The land reforms, which also included more equitable provision of other non-land inputs such as credit, not only led to a more rapid growth of agriculture, but also to an improvement in real wages of agricultural labourers. The Left Front's other major plank of reform - decentralisation of funds and functions to elected local bodies right from the gram panchayat to the zilla parishad in rural areas - also helped empower the rural poor and ensured that they would benefit from all the rural employment and anti-poverty programmes of the government. Not surprisingly, the proportion of households below the poverty line declined from 56.3 per cent in 1977-78 to 26.9 per cent in 1993-94. The improvement in average calorie intake in rural and urban West Bengal over the same period also provides confirmation of the declining trend in poverty. Between 1993-94 and 1999-2000, the daily average wage of agricultural labourers rose from Rs.28.36 to Rs.54.86, implying a significant increase of 23 per cent in real terms even after taking into account inflation. This increase in daily average wages, in turn, would have contributed to a further decline in rural poverty.

While the State's performance in rural growth is acknowledged, it is generally held that it has performed poorly in other sectors. However, such a view is not entirely correct. There has been remarkable progress in power generation, with the State now surplus in power.

While the new economic policies of the Central government have had their depressing effects on the State as they have had throughout the country, the process of deregulation and removal of licensing requirements have had a positive effect, attracting fresh investment into the State. The partial withdrawal of freight equalisation, for steel, but not for coal, has also helped the State gain some locational advantage.

The 1990s have also seen an increase in industrial investment in the State. The industrial policy announced in 1994 and subsequent initiatives taken by the Left Front government have helped improve the industrial scene. The increase in rural purchasing power following the implementation of land reforms and rural growth has also led to increased rural demand for industrial goods. NSS data for 1999-2000 suggest that rural expenditure on industrial goods now amounts to more than Rs.12000 crore a year, and that the demand is growing at the rate of 10 per cent a year.

The improvement in industrial growth in the State in the 1990s, coming on top of the sustained growth in agriculture, has made West Bengal one of the fastest growing states in recent years. The state domestic product (SDP) grew at constant 1993-94 prices at an annual rate of 6.92 per cent between 1993-94 and 1998-99, with only Gujarat, Karnataka and Tamil Nadu ahead of it. Finally, an analysis done for the Planning Commission suggests that the growth process in West Bengal, based as it is to a considerable extent on small and medium farmers and small and medium industries, has been more employment intensive than in other States.

TALKING to Frontline, Ashim Dasgupta, the Finance Minister, referred to the relevance of the West Bengal experience and of the challenges ahead. He pointed out that the philosophy underlying the development strategy of West Bengal was fundamentally at variance with the policies pursued by the government of India, both since Independence and since the 1990s when indiscriminate liberalisation, privatisation and globalisation became the characteristic features of the Central government's economic policy.

Dasgupta suggested that basic land reforms, as carried out in West Bengal, provided a better level playing field in agriculture, enabling large numbers of small and medium farmers to compete effectively in the market. By putting an end to gross land monopoly the Left Front government improved the efficiency of agriculture and enabled more rapid growth. Promoting healthy competition in the spheres of activity where markets operate through more equitable access and purposeful state and social intervention and emphasising decentralisation and accountability where markets cannot be effective were the twin strategies pursued by the West Bengal government and these would be relevant for the entire country.

Dasgupta stressed that West Bengal was constrained by the limited powers it had as a State of an increasingly unitary Indian Union and by the specific neglect of the State by successive Central governments for political reasons. The State's share of central investments was not only low, but had been declining as well. Biplab Dasgupta, an economist and a Member of Parliament, also pointed out these constraints and drew attention to the delay of more than 20 years that the petrochemical project at Haldia had suffered on account of the Centre's attitude.

Eminent social scientist Prof. Amiya Bagchi suggested that the Left Front should mobilise small and medium industrialists in the same way that it successfully mobilised the peasantry in rural Bengal. Industrial development should be based on growth of small and medium industry with a key role for the public sector. The Finance Minister broadly agreed with these observations and pointed out that the Centre's policy of closure and sale of its public sector enterprises was hurting the State and the country. Dasgupta also pointed out that the industrial situation was looking up with the commissioning, well ahead of schedule, of the Haldia petrochemical complex and the setting up of several downstream units and the improvement in the power situation.

A major thrust area would be information technology, while education - especially professional, technical and vocational - and health would receive greater attention in the period ahead. Dasgupta said that West Bengal, endowed as it was with abundant natural resources and a skilled population and located at the hub of the eastern quadrangle comprising Orissa, Bihar and the northeastern States in India and Bangladesh and Myanmar beyond, a region of some 40 crore people, could well become a major economic powerhouse. The basis for such success would be the strategy of equitable asset distribution and decentralisation of power, resources and accountability. In political terms, to use an apt expression of Surjya Kanta Mishra, the Minister for Health and Family Welfare and Panchayats and Rural Development, West Bengal was trying to move from representative democracy to participatory democracy.

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