The Decline and Recent Resurgence of the Manufacturing Sector of West Bengal: Implications for Pro-Poor Growth from an Institutional Point of View
State-business relations and the question of pro-poor growth have assumed considerable significance in recent times for a variety of reasons: firstly, almost zero growth in formal-sector employment in the industrial sector has severely burdened the already over populated agrarian sector; secondly, a continuous shift from manufacturing-sector to service-sector might have marked the emergence of post-industrial societies, but transition has also resulted in an apparent polarisation within their socio-economic structure; thirdly, such polarisation and inequality have further been exacerbated by the decline of state welfare activities. It seems that the policy of re-industrialisation, and re-emphasis on manufacturing assumed importance as the probable response to certain critical conditions – such as increasing inequality, massive poverty, rising unemployment and declining quality of life for a large number of people – and so the crucial question: can the state in post-colonial societies play a significant role in the processes of economic development as it did historically in the development of the now-advanced countries (Polyani, 1957; Gerschenkron, 1962), while simultaneously projecting its image as pro-people and pro-poor (Basu, 1991)?
In this paper, we intend to concentrate on the role of the leftist government in the Eastern State of West Bengal, in initiating the processes of reinventing the manufacturing sector and either continuing or discontinuing policies towards pro-poor growth (by pro-poor growth we understand a process of growth where the poverty ratio declines along with a decline in income inequality and a rise in per capita income). The paper will try to provide reasons for the apparent puzzle, why change in government attitudes in West Bengal might have reduced (relative) poverty, but has been unable to generate sufficiently strong growth impetus in order to keep West Bengal at the top of the table in terms of per capita income.
Ajitava Raychaudhuri and Gautam Kumar Basu (Jadavpur University), 2007.
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Last modified: 31 March 2009