A recent working paper by the Economic Advisory Council to the Prime Minister (EAC-PM), observed that West Bengal has experienced a sustained decline in its relative economic performance over several decades. Authored by EAC-PM member Sanjeev Sanyal, the paper titled “Relative Economic Performance of Indian States: 1960-61 to 2023-24” highlights that the ongoing development challenges in the eastern region of India continue to be a significant concern.

The report indicates that maritime states have distinctly surpassed other states in economic performance, with the notable exception of West Bengal. Additionally, while Bihar’s relative economic standing has stabilised over the past twenty years, Bengal continues to lag considerably behind other states and needs accelerated growth to bridge the gap.

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

“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 said.

The report further highlights that from 1960-61 to 2023-24, the western and southern regions of India have demonstrated notably superior economic performance compared to other parts of the country. Following the economic liberalisation of 1991, the southern states, namely Karnataka, Andhra Pradesh, Telangana, Kerala, and Tamil Nadu have significantly outpaced their counterparts, collectively contributing around 30 percent of India’s GDP in 2023-24.

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

Furthermore, since 1991, the per capita income in all southern states has surpassed the national average.

The paper also noted that in the north, states like Delhi and Haryana also stood out. “Delhi has one of the highest per capita incomes throughout the study period.”

According to the paper, in the 1960s, Maharashtra, West Bengal, and Tamil Nadu hosted India’s three largest industrial clusters.

“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.

The analysis, covering the period from 1960-61 to 2023-24, utilises data in current prices to offer insights into the performance of individual states in response to both national and state-specific policy changes.

Image source: PTI