Rise of south and west, fall of Bengal: What govt economic paper reveals

While West Bengal has recorded a continuous decline in its relative economic performance from 1960-61 to 2023-24, western and southern India have performed notably better than other parts of the country in this period, a working paper by the Economic Advisory Council to the Prime Minister (EAC-PM) has revealed.

Authored by EAC-PM member Sanjeev Sanyal, the paper Relative Economic Performance of Indian States: 1960-61 to 2023-24 says the development of the eastern parts of the country remains a concern.

East a concern, Odisha better

It says maritime states have clearly outperformed other states, with the exception of West Bengal.

Although Bihar’s relative position has stabilized in the past two decades, it remains significantly behind other states and requires much faster growth to catch up, the paper notes.

Conversely, Odisha, traditionally a laggard, has shown a marked improvement in recent years.

Fall of Bengal

“West Bengal, which held the third-largest share of national GDP at 10.5 per cent in 1960-61, now accounts for only 5.6 per cent in 2023-24. It has seen a consistent decline throughout this period.

“West Bengal’s per capita income was above the national average in 1960-61 at 127.5 per cent, but its growth failed to keep pace with national trends. As a result, its relative per capita income declined to 83.7 per cent in 2023-24, falling below that of even traditionally laggard states like Rajasthan and Odisha,” the paper says.

Rise of west and south

It further notes that the western and southern regions of India have performed notably better than other parts of the country from 1960-61 to 2023-24.

Southern states have significantly outpaced others after economic liberalization in 1991, with the five states — Karnataka, Andhra Pradesh, Telangana, Kerala, and Tamil Nadu — collectively accounting for about 30 per cent of India’s GDP in 2023-24.

South states leading performers

“Before 1991, southern states did not show exceptional performance. However, since the economic liberalization of 1991, southern states have emerged as the leading performers,” it says.

In addition, per-capita income of all southern states became higher than the national average after 1991.

Diverged fortunes

As per the paper, Maharashtra, West Bengal and Tamil Nadu were home to India’s three largest industrial clusters in the 1960s.

“Their fortunes subsequently diverged — Maharashtra showed broadly steady performance throughout, West Bengal’s share has been in continuous decline. After a decline, Tamil Nadu picked up post-1991,” it said.

Performers in north

The paper also notes that in the north, states such as Delhi and Haryana also stood out. “Delhi has one of the highest per-capita incomes throughout the study period,” it says.

All data used are in current prices and the analysis spans 1960-61 to 2023- 24, providing insights into how individual states have performed in response to changes in national and state-specific policies.

(With agency inputs)