Chief Economic Advisor to the government Arvind Subramanian today said the legacy of the huge debt burden is not the root cause of West Bengal’s problems.
“The debt burden is not the root cause. It is a problem of today”, Subramamian said during an interaction with the audience at the Indian Statistical Institute here.
He said that “determinants of growth like state capacity, developmental expenditure, capital expenditure and doing business was not easy in West Bengal”.
However, he said that the state could reap the benefits from Look East policy, lower cost of land and real estate in attracting investments.
“There are possibilities. But will the state’s political economy allow the necessary changes to occur to take the advantages?” he asked.
The CEA said West Bengal would benefit a lot from GST and greater resources would flow from the recommendations of 14th Finance Commission.
Subramanian, who was speaking on ‘Reversal of West Bengal’s Fortunes’, said that at some point of time, the Calcutta Presidency was way ahead of Bombay and Chennai Presidencies and also Delhi.
“The Calcutta Presidency was at the top. But certainly not today”, he said.
Quoting statistics, he said that West Bengal was now slightly above the BIMARU states in terms of per capita SDP, the human development index was also slightly better than average, while the quality of higher education and infrastructure was poor.
“Rural poverty alleviation, rural inequality elimination were moving in the right direction, but urban inequality did not improve”, he said.
Regarding industrialisation, he said that there had been a striking premature de-industrialisation which had taken place in the state since 1984.
“In 1984, the share of employment in manufacturing peaked and then de-industrialisation started at an early stage of development”, he said, adding that land was still a challenge.