The Communists Kick-Started Bengal’s Decline Exactly Half A Century Ago

There is nothing ‘golden’ about this jubilee. May 1967 will stand out as perhaps the darkest spot in Bengal’s recent history, which is riddled with many dark spots anyway.

It is well known that the Naxalbari uprising which devastated the state and doomed a couple of generations started exactly 50 summer ago. What is little known is that the first United Front government, which came to power in March 1967 with Jyoti Basu as the deputy chief minister (he was the actual power behind the ‘throne’), passed a black law in May 1967 that would prove to be the single biggest factor behind the sharp industrial, and economic, decline of Bengal.

Labour unrest and disputes between the management and workers of industrial units had already started becoming commonplace ever since the United Front ─ a coalition of parties with communists and breakaway factions of the Congress ─ came to power. The government, especially the communists, took the side of unruly workers and a new tactic ─ gheraos (besieging blockades), which became Bengal’s ignominious contribution to the English language and the Oxford dictionary in 2004 ─ became the preferred tool of the workers to beat the managements and owners of industrial units into submission. Owners and senior managers would be gheraoed (besieged) in their offices for days, often without food, water and medicines, till they succumbed to the workers’ (grossly unreasonable) demands.

Initially, the police would intervene to break the gheraos and rescue the owners and senior managers. But in late May 1967, the state government issued a circular debarring the police from interfering in such blockades without the labour department’s prior permission. Immediately, the number of gheraos increased; from 32 in March that year, the number of gheraos rose to 151 in May 1967 and then to 176 in June that year. Though the Calcutta High Court struck down that circular, the state government issued a fresh one on 12 June 1967. The High Court intervened again and asked the police to ignore the circular and act in accordance with the law, but the uniformed force could do little since the communists, who were siding with the unruly workers, were controlling the government. There were 1,018 gheraos from April to August, 1967.

These gheraos, say industry watchers and economists, were the single largest factor behind the subsequent lockouts and closures of industrial units as well as the flight of capital from the state. “Owners and management of industries were forced by these gheraos to sign agreements with the workers. The agreements were always about increasing wages and other benefits of workers to unrealistic and unviable levels, reducing their working hours, increasing the number of holidays, and providing free housing, free rations, free uniforms and even free food while on duty, to the workers. There was no way the industrial units could be run profitably if such demands were to be met. Ultimately, most of them closed down,” said Ananya Sundar Ghosh, an economist.

Bickram Banerjee, who runs a software development unit at Noida, recalls how his grandfather was forced to shut down his flourishing chemicals manufacturing unit at Hooghly in 1970. “The gheraos started in mid-1967 and would end only after my grandfather (late Amulya Ratan Banerjee) signed an agreement with the agitating workers to increase their wages or increasing other benefits to them. Once they gheraoed my grandfather to get fish included in their free lunch! Within a couple of years, it became unprofitable to run the unit. My grandfather started incurring huge losses and in early 1970, he was forced to declare a lockout. We fled Bengal and 150 workers lost their jobs, their families were reduced to penury. Five of them committed suicide, some started begging and all others drifted to petty jobs like that of daily labourers, sweepers and rickshaw pullers,” said Banerjee. The sad story of the Banerjees’ factory is a typical one common to thousands of industrial units that used to flourish in Bengal till the communists came to power.

Matters became worse when the second United Front formed the government in Bengal in February 1969. That year, a total of 551 industrial strikes and 73 lockouts were reported in Bengal and 5.7 lakh workers were adversely affected. And by then, the downslide in Bengal’s fortunes had started. The figures speak for themselves: in 1966, Bengal’s industry accounted for 20.1 per cent of the country’s total industrial output. In 1967, it dropped sharply to 18.4 per cent. The ex-factory value of output dropped from Rs 1,453 crore in 1966 to Rs 1,422 crore in 1967, and to a further Rs 1,416 crore in 1968. In 1970, a year after the second United Front government was sworn in (though it lasted for 13 months), Bengal’s share of the country’s industrial output had dropped to 12.8 per cent. In 1977, when the communists formed the government on their own, the state’s share of the country’s industrial output had declined to a further 10.2 per cent and in end-2000, when Basu handed over the reins of power to his successor Buddhadeb Bhattacharjee, it stood at a shameful 3.7 per cent. Today, it stands at 2.9 per cent!

Bengal’s present finance minister says that 56,000 industrial units closed down in the state since 1967. There were 18 flights a week to London originating from Kolkata till the mid sixties. There are only eight hopping flights to London from the city today. In 1950, factory employment in Bengal was as much as that of Bombay state (comprising present-day Maharashtra and Gujarat). Today, it does not figure in the top 12 in factory employment. Bengal’s share of net value addition in industrial sector fell from more than 14 per cent in 1971 to less than 4 per cent in 2002, while its share of factory employment fell to less than 5 per cent in 2000. In 1960-61, Bengal ranked second after Bombay state in per-capita income. It fell to fourth after Maharashtra, Gujarat and Haryana in 1970, and by 2000, it ranked tenth after Gujarat, Maharashtra, Haryana, Punjab, Himachal Pradesh, Andhra Pradesh, Karnataka, Kerala and Tamil Nadu. Today, Telangana, Uttar Pradesh, Odisha and Jharkhand have overtaken it, pushing Bengal down to fifteenth position.

The devastating effect of the communists assuming power in 1967, and the industrial unrest they triggered in the form of gheraos, can be gauged from the sorry figures outlining the fall in the state’s per capita income, share of industrial output, gross state domestic product and employment. In 1951, Calcutta was India’s biggest port handling 9.4 million tonnes of cargo as compared to 7.5 million tonnes handled by Bombay. Today, it ranks seventh, but that’s because its operations are combined with that of the Haldia Dock Complex. Thus, the communists’ anti-industry and anti-capital policies caused the severe industrial and economic decline of Bengal. What also aided the fall was the rise of Naxalism and violence in the state. And it all started in May 1967, exactly 50 years ago.

Bengal today is the most indebted state in the country. The communists dragged the state deep into the red (their signature colour, incidentally). When they were ultimately ousted from power, the state’s debt stood at a debilitating Rs 2 trillion. It is more than Rs 3.3 trillion today. A whopping Rs 32,000 crore went into debt servicing last year. The present Trinamool Congress government, which is often no better than its predecessor, has not shown any financial prudence and as a result, the state’s debt increased by 64 per cent over the last six years. Bengal’s financial position is only set to worsen.

The tragedy of Bengal is that it lives on borrowed glory (Tagore & Co), borrowed capital, borrowed ideology (Marx, and Mamata Banerjee has turned out to be more Marxist than the CPM itself) and is now living on borrowed time.