February , 2020
Eastern region driving Indian growth
17:26 pm

Aritra Mitra

The Indian economy is going through a continuous slowdown and that’s reflected in its GDP growth rate. The latest figures indicate 4.5% growth (Q2, FY19-20). There have been some efforts to revive the economy but the global downside risks have had a detrimental impact on the domestic outlook. In an interview with BE, Sanjeev Dalodria, Executive Director, Visa Special Steel, had said, “In today’s scenario, people who are earning money are looking at opportunities to save money in case of job loss so that he can have sufficient money to sustain his family.” The effect of the economic slowdown has compounded due to this lack of purchasing power.

Current situation

According to market insiders, several core sectors including automobiles, real estate, and manufacturing are facing difficulties. Domestic auto sales continue to decline, with the overall auto industry reporting a decline of 23.55% in August 2019. With a decline of 31.57% in the month, the downfall in the passenger vehicle segment has continued for over a year for the first time in a decade. The real estate sector is grappling with the worst-ever slowdown in many decades - over 1.3 million houses worth about 5% of the GDP are lying unsold across India.

In the Union Budget 2020, Finance Minister Nirmala Sitharaman claimed that the fundamentals of the Indian economy are strong. She also added, “Inflation has been well contained. Banks saw a thorough cleaning up of accumulated loans of the past decade and then they were recapitalised. Companies were provided an exit through the IBC. Several steps on the formalisation of the economy were taken up.” However, various experts and critics opined that there have been no concrete efforts to pull the economy out from the slowdown.

It can be said that there is no dearth of potential for the Indian industries. The Government of India, under the Make in India initiative, is trying to boost the contribution made by the manufacturing sector and aims to take it up to 25% of the GDP from the current 17%.

Eastern prospect

A KPMG report in 2018 stated that the eastern region states like West Bengal, Bihar, Odisha, Jharkhand and Assam were expected to contribute at least 25% of the country’s GDP by 2035. The report further added that the country’s GDP would touch Rs. 195 lakh crore by that period.

The eastern region would be driven by key industries like jute, leather, tea, locomotives, steel and mining. According to media sources, the region accounts to more than 20% of the national output in each of these industries. Industry insiders are of the opinion that this region has an immense impact on the core industries. In this region, MSMEs are the highest contributors in industrial output but due to fewer banking facilities, finance has always been a problem in this region.

West Bengal

West Bengal is the second largest tea-producing state in India and is home to the globally acclaimed Darjeeling tea. In 2018-19, the total tea production in West Bengal stood at 394.22 million kg that amounted for 29.27% of India’s total production and reached 355.76 million kg during April-October 2019.

In agriculture, West Bengal is the largest producer of rice in India that amounted to 14.99 million tonnes in 2017-18. In 2018-19, West Bengal produced 13.78 million tonnes of potatoes which was the second largest in the country and accounted for about 24.31% of India’s potato output.

West Bengal has also put great emphasis on the power sector, as of November 2019, the state had a total installed power generation capacity of 10,786.89 MW. Among it, 6,607.95 MW was under state utilities, 2,842.34 MW was under the control of the private sector and 1,336.60 MW was under central utilities.

The state is also a key producer of petroleum and petrochemicals. Available data states that production of natural gas in the state reached 710.46 million cubic metres in 2018-19 and during April-October 2019 it reached 380 million cubic metres.

In order to boost the IT industry of the state, the state government has introduced the West Bengal Information Technology and Electronics Policy in 2018. Available data states that the total export from the IT sector of the state is estimated to have crossed `19,000 crore ($ 2.83 billion) in 2016-17.


Bihar ranks very high in agricultural output and almost 80% population of the state is engaged in agricultural production which is much higher than the national average. The state produced 6,787.8 thousand MT of rice and 62 thousand MT of pulses in 2018-19.In 2018-19, the total horticulture production in the state was 21,204.97 thousand MT with 1,185.36 thousand hectares of area under production. Sugarcane is grown in approximately 6% of the total area under cultivation in Bihar and production in the state for 2018-19 stood at 182.85 lakh MT. During the sugar season of the current fiscal, 11 sugar mills were operating in the state of Bihar. During 2019-20, 220.50 lakh MT sugar is estimated to be produced in Bihar.

Tourism is also an important industry in Bihar. The foreign tourist arrival in Bihar in 2018 was around 1.09 million. Domestic tourist arrival in the state stood at 33.62 million during the same time. In 2019 (till September), foreign tourist arrival reached 0.70 million and domestic tourist arrival stood at 16.94 million.


Mining and mineral extraction, engineering, iron and steel are the major industries in Jharkhand. Jharkhand is rich in mineral resources such as coal (27.3% of India’s reserves), iron ore (26% of India’s reserves), copper ore (18.5% of India’s reserves) and others.

About 80% of the rural population of the state depends on agriculture. Rice is the major food crop of the state, covering 80% of the cropped area. In 2018-19, total production of horticulture crops in the state of Jharkhand stood at 4.62 million tonnes, while the total area under cultivation was 415.20 thousand hectares.

Jharkhand offers a wide range of fiscal and policy incentives to industries, under the Industrial Policy, 2012.

The state also has policies for IT and special economic zones (SEZs) offering sector-specific incentives, as well as the Jharkhand Energy Policy 2012 which aims to supply reliable and quality power in an efficient manner at a reasonable price.

The state is the largest producer of tasar silk (a non-mulberry silk) in the country, with 76.4% share in the total output. In 2018-19, raw silk production in state was 2,375 MT.


Odisha has emerged as a key state with regards to mineral and metal based industries. At 34.3% in 2018, Odisha contributed the largest share of mineral production in India in terms of value. Value of minerals produced in the state reached $3.98 billion in 2018-19 (till February 2019).

It is the first state in India to have undertaken reform and restructuring initiatives in the power sector. As of November 2019, Odisha accounted for a total installed power generation capacity of 8,870.81 MW, comprising 3,828.22 MW under state utilities, 3,423.91 MW under the private sector and 1,618.68 MW under central utilities.

Healthcare in the east

The eastern region healthcare fraternity is rising towards a robust growth. Eastern India have repositioned itself as a forward-looking state and they are enabling to become a major healthcare hub for neighbouring countries like Bangladesh, Bhutan, Myanmar and Nepal healthcare services are yet to achieve desired levels in these regions.

The healthcare sector in West Bengal and the north eastern region is garnering enough steam as each state government is focusing in the reforms and policies of the domain.

They are implementing different financial mechanisms as well as governmental reforms and policies. Eastern India is progressing towards building an affordable healthcare for all - combating challenges like scarcity of funds, lack of physical infrastructure and policies.

Destination East

The CII and the Department of Tourism, Government of West Bengal is working together to promote various parts of West Bengal with the ‘Destination East’ initiative. West Bengal has turned out to be one of the largest travel marts in this country, because of its continuous efforts to promote this beautiful land. Foreign Tourist Arrival (FTA) HAS increased substantially in West Bengal compared to other states in India and has gone up from 12.19 lakh in 2012 to 16.17 lakh in 2018, denoting an increase of 32%.

Investment in development

Industry experts are of the opinion that in order to rebuild the east, investments and initiatives are required. The CII Annual Report 2018-19 states, “If India has to achieve its targeted growth potential, most of the states have to play a crucial champion role.” It is important for the stake-holders – the government, industry and society, to come, think and work together in this process.


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