Both states have seen very high levels of political stability. Yet, why has Odisha been such a near miracle in reducing poverty and improving the standard of living of citizens while West Bengal has regressed in relative terms?
Political stability and continuity can be an overrated factor in a democracy. Particularly when it comes to quality of governance and economic performance. There are many analysts who still insist that relatively stable governments are closely interlinked with superior economic performance. They concede that other factors could play a role in improving the quality of life of citizens of a state or country; in reducing poverty and in increasing per capita incomes.
There are others who argue that political stability has nothing to do with economic performance. What does contemporary data suggest? If you have time and patience to sift through data that measures the economic health of a state, West Bengal and Odisha offer startlingly contrasting tales. In fact, they reinforce the commonsense argument that you can have all the political stability you want, but ordinary citizens will pay an economic price if the quality of governance, for whatever reasons, is poor.
As India gears up for a crucial and defining Lok Sabha elections in just a few months, it is worthwhile examining West Bengal and Odisha for some sobering lessons. Along with Gujarat, Odisha and West Bengal have seen the most stable political governments in this century. In fact, the latter two perform “better” than Gujarat on this count in some ways. In this century, Gujarat has seen five Chief Ministers: Keshubhai Patel, Narendra Modi, Anandiben Patel, Vijay Rupani and Bhupendra Patel.
In contrast, West Bengal has seen just two Chief Ministers in the same time period: Buddhadev Bhattacharya between 2000 and 2011 and Mamata Bannerjee since then. Both have massive mandates and huge majorities to back them. Odisha is another extreme. Since 2000, it has seen just one Chief Minister in the form of Naveen Patnaik. West Bengal and Odisha differ from Gujarat in another way: they have been dominated by regional parties this century, with national parties yet to establish their dominance.
Of course, Gujarat ranks far ahead of both in terms of per capita income, agricultural and industrial growth. So let’s leave Gujarat out of this and focus on the trajectory of West Bengal and Odisha since the beginning of this century. Odisha first. When Naveen Patnaik was first elected Chief Minister, he was a political novice by all yardsticks. It was in 1997 that he became a politician.
More important, when he became the Chief Minister, Odisha was in a shambles. The super cyclone of November 1999 had shattered an already poor and tottering economy. Back then, Odisha competed with Bihar to wear the crown of being the number one basket case. It had the highest incidence of poverty and the lowest per capita income among major states.
The future looked dark, at least in terms of economics. Most analysts back then wrote off Naveen Patnaik as an accidental politician who had become the Chief Minister only because of the popular legacy of his late father Biju Patnaik. West Bengal, despite its troubles, was so far ahead of Odisha that anyone even attempting a comparison between the two would have been labelled a lunatic.
What about West Bengal? When Buddhadev Bhattacharya became Chief Minister, the Left had already ruled the state continuosly for 23 years. While many industries and investors had fled from the once most industrialised state of India thanks to Marxist depredations, it was still the most prosperous state in eastern India.
Besides, the new Chief Minister seemed determined to reinvigorate industrial investments in the state with tailormade policies. The industrial base was already there. All that was needed was a conducive, investor friendly environment where trade unions did not shut down factories at their whims and fancies. The future could be bright. To put things in perspective, when Bhattacharya announced his intent to reindustrialise the state, the per capita income of West Bengal was more than 50% higher than that of Odisha.
The percentage of people living below the poverty line in West Bengal was a shade lower than 25%. In contrast, the number for Odisha was more than 50%. In almost every indicator and parameter that could be used to measure economic performance, Odisha was miles and miles behind its neighbour. Any talk of catching up would have looked foolhardy back in 2000. Now let us look at the numbers now.
Consistently since the last two decades, the GDP growth rate of Odisha has outpaced that of West Bengal. Because of this, the per capita income of Odisha went ahead of West Bengal in 2021 and the gap is widening by the year. The few parameters where West Bengal outperforms Odisha are legacy hangovers and it is a matter of time before even that advantage disappears. One can confidently say that in about five years’ time, the per capita income of Odisha will be 50% more than that of West Bengal.
There is data to back up this prediction. For instance, the Reserve Bank of India had released a study that analysed actual bank credit backed new investments for all major states of India in 2022-23. These are actual investments; not MOUs signed in investor summits. The amount of investments going to West Bengal was Rs 3,500 crores. The amount of investments going into Odisha was ten times higher at Rs 35,000 crores. There is more data that the authors need not analyse in painful detail. Take just one more data point.
The per capita GST collection in Odisha in December 2023 was more than double that of West Bengal. There was a time when poor migrants from Odisha would flock to West Bengal for jobs as cooks and waiters. Poor migrants from Odisha can still be found in large numbers in Gujarat, Delhi, Telangana and Karnataka.
But they are now heavily outnumbered by desperately poor migrants from West Bengal. Remember: both the states have seen very high levels of political stability. There has been no question of any threat to ruling regimes and their big Assembly majorities. Both have been ruled by popular and charismatic leaders. Both have successfully thwarted the efforts of the BJP to breach their fortresses. Yet, why has Odisha been such a near miracle in reducing poverty and improving the standard of living of citizens while West Bengal has regressed in relative terms? Common sense again.
Political stability on its own is meaningless unless a state offers a welcoming and conducing environment to investors and entrepreneurs. Odisha under Naveen Patnaik has done that. West Bengal under Buddhadev Bhattacharya and Mamata Bannerjee has failed. This should be food for thought for scholars of political economy in India.
They can study another contrast. Karnataka has seen frequent political instability and a large number of Chief Ministers this century. In contrast, Bihar has seen just two Chief Ministers (barring Jiten Ram Majhi as a puppet) in the form of Rabri Devi and Nitish Kumar. How has that helped the ordinary citizen of Bihar compared to the ordinary citizen of Karnataka?
Yashwant Deshmukh is Founder & Editor in Chief of CVoter Foundation and Sutanu Guru is Executive Director.