Bengal Responsible For Its Own Poor, Says Finance Minister Nirmala Sitharaman

Union Minister of Finance and Corporate Affairs Nirmala Sitharaman bashed the government of West Bengal on Tuesday by calling it fiscally irresponsible, among many other allegations, in a speech that was supposed to address the development of East India at a cultural programme organised by a group related to the Bharatiya Janata Party (BJP).

The minister claimed that the governing Trinamool Congress (TMC) in Bengal was allegedly withholding the benefits of central government schemes from the impoverished poor for political motives. “Why are you (TMC) denying something to the common people for the sake of politics? Why are you denying Ayushman Bharat to the poor,” asked the minister furiously.

She accused successive state administrations in West Bengal of economic mismanagement, asserting that the state’s culture has become synonymous with syndicated crime and extortion. Addressing the TMC’s allegations of the Union government withholding MGNREGA dues for Bengal, she questioned the feasibility of releasing funds “when there are 25 lakh fake job card holders.”

These allegations arise amidst the backdrop of the minister emphasising during her presentation of the Union Budget this year that the development of East India is set to be a major priority moving forward, and ahead of the 2024 Lok Sabha elections.

Sitharaman highlighted that Bengal ranked 23^rd among Indian states and Union Territories in per-capita growth for the year 2021-22. She further noted that between 2011-12 and 2019-20, Bengal’s per-capita income experienced a growth of 4.2 per cent, compared to the national average of 5.2 per cent.

However, she pointed out that Bengal had achieved a growth rate of 5.5 per cent between 1993-94 and 1999-2000, surpassing India’s growth of 4.6 per cent during that period. The minister emphasised that the state’s per-capita income growth began to lag behind the national average from 2001 onwards, coinciding with the tenure of the Left front as the ruling party in Bengal.

The minister further blamed the present Mamata Bannerjee government for the state’s poor fiscal health. “In 2010, Bengal accounted for 6.7 per cent of capital formation in India. Now, it is only 2.9 per cent. The state has taken no steps to reverse the downward trend,” she claimed, while noting that a large portion of Bengal’s revenue goes towards servicing debt and pensions, leaving it with no fiscal room to implement any scheme.

Another fact that the minister pressed upon was that over the past two decades, approximately 1.1 million workers, spanning from high-end professionals to those at the bottom of the workforce, have migrated out of West Bengal. This shift is notable considering that West Bengal was previously a state that received good amount of labor until 2010, she added.

In response to the FM’s remarks, TMC spokesperson Kunal Ghosh replied, “The finance minister is speaking like a BJP cadre. Bengal came out first in 100 days of work and now she is speaking about fake job cards. Let the central team go to the states that have fake job cards. The Centre is taking Rs 4,64,000 crore from the state but is not paying our due Rs 1,50,000 crore.”

Furthermore, Ghosh accused the central government of vindictive politics after failing to win governance in Bengal.

Allegation of Bringing Down the East

The speech of the finance minister echoed the words of Prime Minister Narendra Modi’s economic advisor Snajeev Sanyal who firmly believes Bengal’s downfall to be a major chapter in the story of East India’s poor. In an exclusive interview with Outlook Business, the economist and historian had said, “There are many reasons why eastern India is poorer than western India, even though eastern India has a lot of natural resources and used to be a major industrial hub till at least 1970. My view is that a lot of this relates to the failure of Kolkata and its industrial cluster.”

Also Read | All about inter-state growth divergence in the February 2024 issue of Outlook Business magazine.

He pointed out to the fact that Kolkata was once the single biggest industrial hub in Asia, outside of Japan, and therefore, had the opportunity to become the most dynamic industrial hub in the whole continent. But the opportunity was wasted due to the politics of the state, which destroyed the work culture, industrial zone and ultimately led to economic fossilisation from which the city, and more generally eastern India, has never recovered.

When asked why only Kolkata should be held responsible, he said, “Some urban hub has to be an anchor to get things going. It could be Bhubaneswar or maybe Patna and Ranchi. It is possible that some other city can do it, but even today, Kolkata would have the biggest bang for the buck if it could get growing again. After all Kolkata is still by some margin, the largest urban agglomeration in eastern India.”

He added that the failure of Kolkata to create a similar dynamic like the Delhi-NCR and the expanding corridors towards Jaipur in the North, cities such as Mumbai, Pune, Ahmedabad and Surat in the West, and the triangle of Hyderabad, Bangalore and Chennai in the South, for the East India pushed the region backwards in terms of economic growth.