Monthly per capita consumption expenditure of Bengal is lower than all the Northeastern states: Sitharaman

Union Finance Minister Nirmala Sitharaman said that the monthly per capita consumption expenditure of Bengal is lower than all the eight Northeastern states. 

The Union minister highlighted that Bengal, which used to contribute nearly 25 percent of India’s manufacturing GDP in 1947 now contributes less than 3 percent. Once, one of the richest states of India, its annual per capita income was one of the highest in the country in 1947. The state today is ranked in the bottom-most category, she said in her address at the 'Bisistha Nagrik Sammelan' in Kolkata, West Bengal on May 15. 

Elaborating further, the finance minister said West Bengal’s growth rate was 5.5 percent while the all-India average was just 4.6 percent up till 2010 but gradually it slipped further and further.  

She attributed the fall to the absence of industries in the state resulting in loss of job generation leading to a fall in the per capita consumption expenditure (how people are able to spend for their families).

“As of February 25, 2024, Bengal ranked sixth lowest in rural and eighth lowest in urban categories. The monthly per capita consumption expenditure of Bengal is lower than each of the eight Northeastern states,” Sitharaman said. 

The minister said that the comparison is not to highlight that some states are better, some states are poorer. Northeastern states are making strides in terms of total economic activity despite their geographical difficulties. 

In 2021, Bengal’s total industrial production was just 3.5 percent, it was 24 percent during the Emergency, she said. 

The minister said that it’s not as if this part of India is no longer attractive for industry. Citing the example of a semiconductor manufacturing unit going to Assam, Sitharaman said, “You tend to think that industries, which go to the Northeast are normally the core sector industries like cement because there's a lot of limestone available in some parts of northeast, or you tend to think bamboo processing industries because there’s a lot of bamboo growing there. But all of you would be aware that India’s own big-ticket investment in chip manufacturing has gone to Assam.”  

Bengal, which was known for manufacturing power, could not be proactive in attracting industry, she added. The Union minister called for the creation of an ecosystem to attract industry to the state and cited the example of Bengaluru, Gujarat, and Assam where the ecosystem was built for industries to come and set up shop.  

Sitharaman also shed light on migration and capital creation in the state.  

Even till 2010 meaning despite a Communist government in power, the net migration into Bengal was in the positive territory, she said. Explaining further, she said the balance of people moving out and people coming here was still in Bengal’s favour till 2010 when migrant labourers came here because opportunities existed due to activity and therefore generated income.”  

At that time Bengal’s capital formation was about 6.7 percent now it accounts only for 2.9 percent, the minister said. Unless capital formation happens, you’re not going to have industry or activities coming in here migration was net to your positive at that time even till 2010 but this gradual downward trend in capital formation has not been reversed since after the TMC government has come into play, she added.