When contrasted with the figures of the CSO, RBI data, enterprise survey reports, West Bengal government’s economic claims appear manipulated, inflated, even atrocious.
While the Central Statistical Organisation (CSO) under the Ministry of Statistics & Programme Implementation (MoSPI) standardizes the methodology that must be employed by all states to calculate the respective state domestic products, industrial growth, social impact, etc, the states have their own data collection sources that are more extensive. As a result, a sum of all SDPs (State Domestic Products) may not be the same as the national GDP. However, when the figures vary by more than 20 percent, the Centre seeks an explanation from the particular state whose data the central statisticians are sceptical about. The other states’ data are sent to the Ministry of Finance (MoF).
This year, West Bengal—along with Sikkim and Tripura—got the dubious distinction of the state data being withheld by the MoSPI.
The MoF has accepted the MoSPI’s reservations about the statistics sent by the Bengal government and appreciated the fact that the CSO has summoned its state counterpart for an explanation.
When this correspondent remarked in the Economic Statistics Division of the CSO that the Bengal figures looked “too rosy to be true”, three senior officials of the department burst into a guffaw in agreement. Earlier, officials of the Coordination and Publication Division of the CSO had agreed there was something wrong in the data. But this is still not the whole picture; it is just a question mark hanging over the Bengal department’s cumulative figures. For the lay citizen on the street, it is important to know how an apparently poor state claims to have turned affluent overnight. This cannot be explained by the CSO. For that, let’s study the state department’s figures and compare them with the corresponding or related figures produced by other authoritative agencies.
In 2006 when I last visited the CSO and then the statistical departments of Bengal and Tamil Nadu at a time when their figures looked fishy, the experts at both the Centre and state levels helped me reach three conclusions bulleted below. It is important to note here that officers of the Indian Statistical Service (ISS) speak a monotonous, academic language. A political message can be extracted from whatever they say only by reading between the lines.
- Tamil Nadu was underplaying its achievements in order to extract more grants from the Centre.
- The West Bengal government led by the CPI(M) was overplaying its achievements so that it could claim to the people that Communism works!
- In a bid to establish the efficacy of its policies, Bengal had included growth in sectors such as beauty parlours, restaurants, pubs, etc in the figures for industrial growth. It was noticed that the upward graph of Bengal owed to a phenomenal growth in these enterprises rather than in large- or medium-scale industries.
This trick, however, does not work for long. Once a segment of the economy is recognised as an industry, it has to be recognised as such in all subsequent surveys. Therefore, high industrial growth can be claimed only when the segment just introduced as an industry witnesses good growth. Thus, the Bengal graph hit a plateau thereafter.
Now let’s see what made these “brilliant” figures advertised by the Trinamool Congress (TMC) government in all leading newspapers recently. The only logic that is not questionable in the exercise is the fact that it is easy to score high percentage-wise when the base is low. But even on this count, Bengal hasn’t performed well. Remember, in statistics, you cannot bluntly lie; you can at best manipulate.
There Has Been No Growth
By the end of March 2014, the Annual Survey of Industries by the MoSPI reported that Bengal had 8,857 factories, with a fixed capital of Rs 80,95,594 lakh, productive capital of Rs 1,04,89,358 lakh, invested capital of Rs 1,23,89,799 lakh. It had 5,22,224 regular workers out of a total of 6,45,710 people engaged in some work. Rs 6,43,370 lakh was the wage distributed to these workers. This put Bengal on the 12th rank in a list of states with descending order of the net value added (total workers divided by the average net wage per worker). There is no reason to believe that this ranking has remarkably improved. Yet, just like its Communist predecessor, the Trinamool Congress wants us to believe that its industrial sector is doing better than that of other states.
Imagine the extent of the audacity: the corresponding figures of top-ranking Maharashtra were 29,123 factories, with a fixed capital of Rs 3,26,36,160 lakh, productive capital of Rs 4,46,77,999 lakh, invested capital of Rs 4,87,16,663 lakh; it had 13,11,552 regular workers out of a total of 18,67,438 people engaged in some work. Rs 20,29,682 lakh was the wage distributed to these workers. In terms of payment to the workers, Bengal’s rank was 12 again in the descending order of net value added.
Considering such rankings, if the Bengal government’s claims about the state’s performance cannot be called a lie, only one possibility remains: the growth owes to a sudden spike in activities of the unregistered sector like street vendors, dhabas, small firms running sundry services from home etc. But then, the figures for such businesses can at best be estimates or speculations. And, as said above, this trick cannot be employed year after year.
To account for the graphs advertised by the Bengal government, which look good if the comparison above is not made, let’s study the base effect. In the year 2010 when the TMC government was yet to take shape, Bengal was in the 11th position in per capita income. It continues to hold the 11th rank. In the period 2004-10, this figure was 10.4 percent less than the national average. In 2011-14, the Bengal per capita income is 12.2 percent less than the national average.
Going by this comparison, the Communists were clearly helping the people of the state earn more than their archrival TMC. But the ruling party says it will be wrong to include the year 2011 in the calculations as it was a period of transition. Removing that year, however, does not help strengthen the TMC much. For, the growth in per capita income in 2011 was terribly low: 2.7 percent. Thereafter if it has grown at the rate of 6.3 percent, which is higher than an average of 5.5 percent annual growth during the Communist years, one can attribute that to the low base of 2011.
What Mamata Is Not Saying
Of course, steering clear of this controversy, the TMC government’s advertisement does not showcase the growth (or lack thereof) in the state’s per capita income. But the state’s Finance Minister did make tall claims of per capita income growth following the Global Bengal Business Summit.
Second, some facts that are embarrassing were hidden. According to the 2011 Census, the country has 4,13,670 beggars; out of that, Bengal has the highest number: 81,244 (an astonishing 20 percent), of which 48,158 are women.
As per the figures on rape and other forms of sexual assault and crimes perpetrated on women tabled in Parliament on International Women’s Day, Bengal has led the country in rapes in the years 2012-14: 1,656 cases.
There is no improvement registered in the child mortality rate.
The Bengal government constantly evades the question as to why it donated Rs 15.62 crore, Rs 40.09 crore, Rs 64.15 crore and Rs 115 crore to “clubs” in the successive years between 2012 and 2015.
The Muslims Are The Worst Off
The Rajinder Sachar Committee Report had exposed the fact that Muslims fared poorly in the states governed by the so-called secular parties while they were better off under “communal” governments. The pathetic situation of Muslim representation that was seen under the CPI(M) rule persists under the TMC. Muslims form only 5.47 percent of the about 3.5 lakh state government employees in Bengal, which has a 30 percent Muslim electorate. Out of the police force of a strength of 28,000 personnel, just 9.44 percent are Muslims. At the joint commissioner level, there is only one Muslim officer. In the administrative section of the police, just 3.4 percent are Muslims. Of the 27,000 municipal workers, a mere 4.45 percent are Muslims. In the universities in the state, less than 4 percent students are Muslims. In the Muslim-dominated villages of Bengal, 35 percent have to walk a distance of 4 km to reach the nearest primary healthcare centre; 12 percent of these villagers have to walk at least 8 km to access the local healthcare service.
Bengal Figures Versus India Figures
The Prime Minister has asked the NITI Aayog to monitor the states’ progress in five fields: public distribution system, LPG connections, scholarships, allowances and Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA). Bengal has failed to achieve even 10 percent success in each of these fields.
While 56 percent of rural Indian families are landless, those who don’t own a plot of land in Bengal’s villages are 70 percent of the state’s rural households. At the national level, 44.59 percent do not have houses made of concrete; the corresponding figure for Bengal is 59.27 percent. A marker of upward mobility, mobile phones, also sees poor concentration in the state. Just 54.82 percent of Bengal’s adult population owns a mobile phone as against the country’s 68.32 percent.
A socialist government typically claims to do well on social indices. And a Communist government was replaced five years ago by one that turned out to be more leftist than the Left Front. And we are yet to talk of “capitalist” markers like industrial growth!
No doubt, the sectors that Bengal is traditionally known for, continue to contribute to the state and the nation: jute, rice, fish, tea production and leather tanning. But then, if agriculture is doing so well in the state where urban employment is rare, how come just 18.87 percent of Bengalis’ earnings come from agriculture while in India it is 30.11 percent?
Industry? What Industry?
The breakup of industry in Bengal is: mining and quarrying, manufacturing, construction, registered services and unregistered services.
Where people want to see a positive change is in job availability at the urban centres. The 11th ranking among all states in ease of doing business does not help much, as the states ranked above Bengal continue to attract a larger chunk of educated manpower. In the local lingo, this exodus of skilled labour has acquired an epithet: “Bengaluru Special”!
Foreign investors realize where they will get a bigger bang for their buck. Maharashtra, Delhi and Tamil Nadu received $73 billion, $49 billion and $17 billion of FDI respectively between 2000 and 2015. The figure for Bengal is a very poor $3 billion.
Following the Global Bengal Business Summit of 2014, Mamata Banerjee claimed that the state had signed MoUs worth Rs 2.43 lakh crore during the summit, but her government did not provide a break-up of the amount when asked in the Legislative Assembly except for Finance Minister Amit Mitra saying that Rs 32,000 crore has gone into the power sector and Rs 47,000 crore went to manufacturing and transport, out of projects worth Rs 91,230 crore started in the state. But this is hardly the state’s contribution, as Rs 79,000 crore out of this Rs 91,230 crore is the Centre’s contribution to these sectors of the state’s economy.
An NTPC power plant of capacity 1,600 MW was proposed in Katwa. The state government could not provide enough land for the project. As a result, the capacity had to be scaled down to 1,320 MW. This lack of urgency to create an environment conducive to large-scale industries is felt by any average Bengali who has lived in the state for some time. Even when one observed labour unrest, the workers turned out to be employed in rather small factories that used to produce, at best, spare parts for bigger industries located outside the state.
It is remarkable that India’s Chief Economic Adviser Arvind Subramanian, an outsider, could gauge the problem instantly when asked to comment recently at a congregation of economists in Kolkata’s Indian Statistical Institute. He blamed the state’s “fetish” for small and medium industries and refused to believe Mamata Banerjee’s constant plaint that “debt burden” was the reason why Bengal was unable to turn around. Political scientist Partha Chatterjee and economist Pranab Bardhan agreed with Subramanian. Economist Ashok Lahiri echoed what the TMC’s political opponents say: Mamata loathes land acquisition.
If the power supply scenario is good, thank the limited demand of power from the barely visible industry in the state.
Industrial growth in the state government’s advertised graph shows 7.72 percent, 9.17 percent, 10.85 percent and 11.99 percent in the years 2012-13, 2013-14, 2014-15 and 2015-16 respectively. This does not match a December 2013 report by the now-dissolved Planning Commission that said that Bengal had witnessed a 97 percent decline in industrial investment since 2010, the last year of Left Front rule!
While the state claims a phenomenal growth in revenue collection, which interestingly includes Own Tax Revenue (OTR), the RBI’s comparative analysis shows Bengal in a poor light when compared to other states. Bengal’s OTR ratio to the GSDP is 5.7 percent—among the lowest in India. The TMC’s claim also flies in the face of the facts that (a) its debt to GSDP ratio stands at 35 per cent and (b) it continues to demand of the Centre a moratorium on repayment (or at least the interest component thereof), loan write-offs, rescheduling and special grants.
Bengal has not furnished its SDP numbers as per the new formula adopted by the Centre in early 2015. While there have been critics of the methodology of determining the gross value added at market price (instead of factor cost), this has long been the international practice.
As per the latest vote-on-account presented by Amit Mitra, Bengal is indebted to the tune of Rs 3.04 lakh crore. Next year, this figure is expected to swell to Rs 3.34 lakh crore, as there is no new tax or resource mobilisation technique proposed while there is a 16.9 percent hike (to Rs 57,905 crore) in the plan outlay with Rs 53,869 crore going to social services. These services include minority affairs and madrassah education, backward class and tribal development, self-help groups, self-employment, public health engineering, public works, panchayat, rural development, health and family welfare. How abysmal the state’s performance has been in these sectors in the last five years—budgetary allocations notwithstanding—has been detailed in this article.
With industrial investment still eluding the state, and the government resisting imposition of user charges, nobody knows where the revenue required to gradually clear the debts will come from.