By Ashok Gulati & Bidisha Chanda, respectively Distinguished Professor and Research Assistant at ICRIER
Launching the Trinamool Congress (TMC) manifesto for the upcoming Assembly elections in West Bengal, Mamata Banerjee claimed “there is no development left” for the state. But look at the per capita income (PCI) numbers: In 1960-61, when the Indian National Congress was in power, West Bengal ranked second in the country, just behind Maharashtra. By the time the Communist Party of India (Marxist) took over in 1977, it had already slipped to fifth place. And when Banerjee took over the reins in 2011, the state had slid to 17th place. Three terms later, the state still ranks 16th in 2024-25, with a PCI of `163,467 against a national average of `205,324, while Telangana tops with `387,623.
That is not to say West Bengal has not progressed at all. On social indicators, the story is more impressive. Female literacy among the 15-49 age group stands at 93.1% (Sample Registration System [SRS], 2023). The total fertility rate (TFR) is 1.3, at par with southern states like Kerala and Tamil Nadu (SRS, 2023). This has translated into a population growth rate of just 0.5% per annum against India’s 0.9% and Bihar’s 1.43%. Yet, despite these demographic and social gains, why has this not translated into higher PCI?
One reason is the state’s consistent failure to attract and retain private investment. The pivotal moment came in 2008, when the late Ratan Tata announced that Tata Motors would withdraw from the Nano plant in Singur, attributing the decision to Banerjee’s anti-land acquisition agitation. The signal it sent to every corporate boardroom in India lasted far longer—that West Bengal was not a safe place for long-term capital investments.
Since then, Banerjee has done little to change that perception. In 2013, the West Bengal Incentive Scheme (WBIS) was introduced to promote industrial growth through a range of fiscal incentives. In April 2025, the state passed the Revocation Act, retrospectively withdrawing three decades of promised industrial incentives, explicitly to “make state finances available for various welfare schemes for the socio-economically disadvantaged and marginalised sections of the state”.
Companies that invested on the basis of those incentives now face serious financial losses, with outstanding claims wiped off the books overnight, making fresh investments difficult. In 2023-24, the state’s gross fixed capital formation (GFCF) stood at just 1.2% of its GDP, nearly half of India’s 2.3%. The picture worsens when one looks at the net fixed capital formation, which falls to a mere 0.4% of GDP compared to 1.1% for India. This sharp drop reflects the high level of depreciation, which accounts for 64% of GFCF in West Bengal, much higher than India’s 51%. Ultimately, sustained growth and employment generation depend on private investments. Freebies can temporarily cushion poverty; only industry can cure it. West Bengal appears to have forgotten this lesson.
Let the numbers do the talking. Between 2011-12 and 2024-25, at constant (2011-12) prices, West Bengal’s GDP grew at an average annual growth rate (AAGR) of 4.8%, well below India’s 6.2%, and lagging even states like Bihar (6.5%), UP (6.1%), Odisha (6.3%), Jharkhand (5.6%), and Assam (7%). The picture is even more concerning in agriculture, which still employs 38.2% of the workforce (Periodic Labour Force Survey, 2023-24). The sector grew at an AAGR of just 2.9%, compared to India’s 4%, Bihar’s 3.9%, UP’s 5.7%, Odisha’s 4.6%, Jharkhand’s 5.9%, and Assam’s 6.3% over the same period.
This is puzzling because West Bengal is a leading producer of vegetables—cabbage, brinjal, capsicum, cauliflower, radish, cucumber, and pointed gourd. The problem comes after the harvest. Typically, a farmer receives roughly one-third of what the end consumer pays. The remaining two-thirds is captured or simply lost in the supply chain. Banerjee did attempt to build vegetable value chains on the lines of SAFAL in Delhi (Sufal Bangla), but the results have been limited at best. What the state needs is serious agri-processing investment—a PepsiCo doing contract farming with potato farmers, processors in fisheries, and direct pipelines into high-value domestic and export markets.
West Bengal is not short of resources. It is short of the political will to invest, modernise, and compete. Take jute. The state produces 80% of India’s jute, 6.8 million tonnes in 2024-25 (Unified Portal for Agricultural Statistics, 2025), and hosts 88 of India’s 118 jute mills. By any measure, it should be the global capital of jute, a natural fibre. Instead, most of the output goes into making sacking bags for foodgrains and sugar, sold largely to the government. Bangladesh, starting from scratch after 1971, diversified, modernised, and captured international markets. Darjeeling tea tells the same story: It lost the branding war to Ceylon tea, whose lion logo guarantees certified quality standards enforced centrally by the Sri Lanka Tea Board. Darjeeling, fragmented across individual estates with no unified quality enforcement and a GI tag routinely abused by fraudulent blenders, could offer no such assurance.
And yet, Banerjee’s answer to all of this is freebies; Lakshmir Bhandar, her flagship direct cash transfer scheme for women, alone costs `27,500 crore, nearly 7% of the state’s total budget expenditure of `3.96 lakh crore in 2026-27. There is no major plan for industrialisation or agro-processing supply chain investment. The state’s public debt-GDP ratio stood at 34% in 2023-24, next only to Punjab’s 40%, among major states (State Finances, Comptroller and Auditor General of India, 2023-24), because the welfare schemes are being funded not from growth dividends but from borrowed money. Today’s freebies are tomorrow’s fiscal crisis.
So, what will decide the 2026 elections? Religion? Freebies? Or the Special Intensive Revision controversy? We wish that it is decided on Trinamool’s 15-year performance. History will not be kind to the people of a state who choose freebies over development.