16

“The Government of India predicted that in 2016-17 India’s economic growth will reduce to 7·1% due to demonetisation. … The rate of growth in our state also may be restricted to 9.27% due to this demonetisation” - was how the West Bengal Finance Minister Amit Mitra had begun his macro economic review of the state in his 2017-18 budget speech.

Mitra is concerned that demonetisaton, as feared, has brought down the state’s GSDP growth. For, although at 9.27% state’s economic growth would be considerably higher than the country as a whole in 2016-17; it would mark a decline from its previous record. West Bengal’s GDP has nearly doubled in last five years and has expanded at 10.57% in the decade between 2004-05 and 2015-16.

Agriculture is the chief occupation in the state and contributes about 18-19% to the GSDP. The state is the largest producer of rice in the country. Rice production totalled 16.1 million tonnes in FY 2015-16. This distinction has been achieved by extending irrigation facilities. During last five years the state has brought around 3,23,000 acres of land under irrigation, has strengthened flood protective embarkments and implemented anti-erosion works for 2,237 km.

During the last five years, the state government has been able to bring around 3,23,000 acre of land under irrigation, strengthened flood protective embankments, and implemented anti-erosion works for 2337 km.

West Bengal is the second largest tea producing state in the country. It produced about 329.3 million kg of tea in 2014-15, accounting for about 28% of India's total tea production. West Bengal is also the largest fish producing state in India. During 2015-16, the state produced a total of 1.63 million tonnes of fish in comparison with a produce of 1.61 million tonnes in 2014-15.

But if agriculture remains the main occupation in the state, industrial output in the state has also grown at a higher rate than the national average. In Mitra’s words, “It is encouraging to note that in 2016-17, before demonetisation, for period from April, 2016 to September, 2016 in the State Index of Industrial Production (IIP) the growth was to (+) 4.8% as compared to (–) 0.1% of the country. In other words, while the industrial growth in the country even before demonetisation was in shambles, we were doing reasonably well in the state”.

Much of this economic growth came through sharp increase in state’s plan funding. State’s plan expenditure grew four times between 2010-11 and 2016-17. The capital expenditure has risen as much as seven times during the same period.

The steady rise in plan and capital expenditure has helped to improve the industrial infrastructure of the state. This has prompted industrialists, both from home and abroad, to show interest in the state to set up units. This is reflected when business from across India and 29 countries participated in the Bengal Global Business Summit held on 20-21 January, 2017. Investment proposals worth `2.35 lakh crore have been received in major sectors like urban development, infrastructure development, IT, manufacturing industries etc.

The state (including Sikkim and Andaman & Nicobar Islands) has attracted Foreign Direct Investment (FDI) equity inflows worth $3.93 billion during the period April 2000 to March 2016, according to data released by Department of Industrial Policy and Promotion (DIPP).

Considering the fact that MSME industries create more job opportunities as the sector has better labour output elasticity, the state has given special emphasis to develop this sector. There are more than 37 lakh medium and small enterprises in the State. Credit flow to the MSME sector in the state has significantly increased in the last five years and has reached nearly `1.2 lakh crore.

Higher economic growth should benefit its people and since the trickling down impact of economic growth often bypass the poor the state government has tried to fill in this gap through various social welfare programmes. It has undertaken a large number of people-friendly schemes such as Kanyashree, Sabujshree, Sabuj Sath, Khadya Sathi, Maa Bhoi, Swasthya Sathi, Nijo Griho Nijo Bhumi scheme, Swami Vivekananda Scholarship, and Shikshashree Prakalpa for scheduled cast and scheduled tribe students.