Economy of West Bengal

The economy of West Bengal is a mixed middle-income developing social market economy and the largest Eastern Indian economy with a substantial public sector. It is the India's sixth-largest economy by nominal GDP.

West Bengal is the primary business and financial hub of Eastern India. The state primarily dependent on agriculture and medium-sized industry. West Bengal has jute and tea industry. West Bengal is rich in minerals like coal, limestone, iron ore, copper, lead and zinc.

Since the independence of India, The Green Revolution bypassed the state. However, there has been a significant spurt in food production since the 1980s.

Agriculture and livestock
Agriculture accounts for the largest share of the labour force. It contributed around 14.4% to the gross state domestic product (GSDP) in 2023-24. A plurality of the state's population are peasant farmers.

Major produce
Rice and potato are considered to be the principal food crops. The state is the largest source of the important food crop of rice, a staple diet across India, with an annual output of around 16.76 million tonnes (about 13% of total production in India) in FY 2021-22, and the second-largest producer of potatoes in India with an average annual output of 12 million tonnes (about 20% of total production in India) in FY 21-22. West Bengal is also the second-largest fish producing state in India after Andhra Pradesh with an annual production of 20.45 lakh tonnes.

Apart from these, jute, sugarcane and wheat are the top crops of the state. Other major food crops include maize, pulses, oil seeds, wheat, barley, and vegetables. Tea is another important cash crop. Darjeeling is globally recognised for tea plantation of the acclaimed Darjeeling tea variety.

Below is a table of 2019 national output share of select agricultural crops and allied segments in West Bengal based on 2011 prices.

It is also the second largest tea-producing state in India, producing 414.08 million kg of tea in 2022-23, accounting for 30.3% of the country's total tea production. In 2022-23, West Bengal produced approximately 1.48 million tonnes of sugarcane and 3.86 million tonnes of fruits. The state is the largest vegetables producing state in India with 26354.61 thousand MT of production in 2020.

West Bengal accounts for nearly 10% of the country's edible oil production. The state produced a total of 2.045 million tonnes of fish in 2022-23 as compared to 1.84 million tonnes during 2021-22 retaining second spot after Andhra Pradesh in fish production. West Bengal produced around 6969.40 thousand tonnes of milk in FY 22-23.

The state is the second largest meat producing state in the country (including poultry) after Uttar Pradesh, producing 1.116 million tonnes of meat in 2022-23 and it is the largest producer of goat meat.

Industry
State industries are mostly localised in the cities of Durgapur, Asansol, Howrah, Kharagpur and Haldia region. There are up to 10,000 registered factories in the state and the West Bengal state government has opened Shilpa Sathi (শিল্পসাথী), a single window agency in order to provide investors with all kinds of assistance in establishing and running industrial units.

Kolkata is noted as one of the major centres for industries including the IT industry. The planned cities of Bidhannagar and New Town, Kolkata are major IT hubs of East India. As of April 2019, Sector V of Bidhannagar had approx 1,500 companies. New Town has emerged as the second IT hub of Kolkata after Salt Lake. Growing number of tech parks makes New Town a preferred destination for IT and ITes in East India. Several Information Technology majors are operational like Ericsson, Accenture, Capgemini, Tech Mahindra, ITC Infotech, Mindtree, Adani Labs, British Telecom, TCS, Wipro, Infosys, Cognizant etc. New Town also houses Bengal Silicon Valley Tech Hub. Bengal Silicon Valley Tech Hub is an under construction technology hub in the Indian state of West Bengal, consisting of various tech parks, buildings, projects and premises which work on the sectors like IT/ITeS, Data Centre, E-commerce, IoT, KPO, AI, R&D and Telecom. The hub is projected to be completed in 2025, generating 1,00,000 direct jobs. As of 2022, the total investment in the hub is ₹1 trillion. It is being built on an area of 250 acres.

FinTech Hub (formerly known as International Financial Hub) is a financial, commercial centre and business district located in New Town. The hub has the presence of a large number of banking, financial companies and legal institutions. Many major companies have their headquarters, offices and training centres operational or under construction. In 2010, inspired by the Bandra Kurla Complex in Mumbai and to turn Kolkata into an international financial centre, the then chief minister of West Bengal Buddhadeb Bhattacharjee and finance minister Asim Dasgupta proposed an International Financial Hub on 100 Acres of land in New Town. The union finance minister of that time, Pranab Mukherjee laid the foundation stone of the project on 13 October 2010. The project had a deadline to be completed in five years. In 2017, the project was relaunched as a FinTech hub. The purpose was to develop financial technology industry in West Bengal. In 2020, 23 financial institutions had their offices setup in the hub. First 10 acres were identified which was afterwards expanded. On 10 September 2021, HIDCO released an online portal for owing plots easily. Up to September 2021, 48 acres were allotted in 70 acres. As of 2022, 28 financial and legal institutions have their offices in fintech hub.

MSME contributes to a major portion of the GDP of West Bengal. West Bengal has the second highest MSME units in the country after Uttar Pradesh. According to National Sample Survey Office (NSSO) 73rd round of survey, West Bengal had 88.67 lakh MSME units (14% of total in India). There are numerous steel and other heavy engineering plants and production facilities in Durgapur. The centre has established a number of industries in the areas of tea, sugar, chemicals and fertilisers. Natural resources like tea and jute in and nearby parts have made West Bengal a major centre for the jute and tea industries. West Bengal is at the forefronts of leather processing and leather goods manufacturing and has around 666 units producing leather and leather related goods. Currently, 22-25 percent of India's tanning activity is undertaken in Kolkata and its suburbs. Kharagpur has also numerous industries of various types such as iron works, cement, chemicals, etc. The state's share of total industrial output in India was 9.8% in 1980–81, declining to 5% by 1997–98. However, the service sector has grown at a rate higher than the national rate.

Jangal Sundari Karmanagari is an under construction industrial city complex and township in Jangalmahal, Purulia. Jangal Sundari Karmanagari has projected a potential investment of ₹72,000 crores. ₹1,144 crores has been used for creating basic infrastructures. The industrial city will generate employment for 1.5 lakh people. Major industries include cement, steel, auto component, engineering, MSME clusters, ceramics and electricals.

In Phase I of the project, 1749 acres were allocated and in Phase II, 734 acres were allocated.

Jangal Sundari Karmanagari has received investments from Rashmi Steel (800 acres), Shyam Steel (600 acres), Captain Steel (300 acres), Super Smelter, Maithan Alloys, Vikash Metal and Power Limited. As of March 2023, about 7 thousand people were employed in around 513 acres steel factory, which got an investment of ₹3,220 crores. Shyam Metalics is constructing has acquired 600 acres and has started construction (as of March 2023) of a steel plant in 600 acres with an investment of ₹4,591 crores and expected employment of 10,000 people. A cement factory is under construction in 70 acres with an investment of ₹400 crores.

Chittaranjan Locomotive Works and Titagarh Rail Systems are rolling stock manufacturers located in West Bengal. Titagarh Rail Systems is the second largest freight wagon manufacturer in India. Chittaranjan Locomotive Works is the largest locomotive manufacturer unit in the world, producing 431 locomotives in 2019–20.

The first production unit of Hindustan Cables was set up in 1952 in Rupnarayanpur, in technical collaboration with Standard Telephones and Cables Ltd. for production of paper insulated dry core cables. In 2007 updated and expanded Rupnarayanpur unit, with an installed capacity of 63 LCKM, manufactures polythene insulated jelly filled cables and aerial cables. Facilities for manufacturing 1 million pairs of telephone coiled cords and 1.5 million pieces of computer cords have been set up in the unit. The telephone cords (2 way ovular straight and 4 way ovular extensible etc.) conform to latest specification and cater to Indian market and the computer cords for Computer Industries. The Steel Authority of India IISCO (Indian Iron and Steel Company Ltd) steel-making plant at Kulti was the first such facility in India. It became well known during the 1960s and 1970s, with its company shares being traded on the London Stock Exchange. However, a decade later the company became loss-making until it was revived in 2006 when it merged with the Steel Authority of India. Modernisation at IISCO Steel Plant has helped the city develop at a very rapid pace. The plant's capacity will be raised from 0.4 MT to 2.5 MT of saleable steel, using what will be the biggest blast furnace in the country. As of 2015, the investment for modernisation was the single largest investment in West Bengal till then.

The northern districts of Darjeeling, Kalimpong, Jalpaiguri, Alipurduar are famous for growing tea and they are exported world-wide for their supreme taste and quality. Many tea processing units are present here which contribute to the economy of the districts.

Power and energy
As of end of March 2024, according to data released by Central Electricity Authority, the installed power capacity of the state is 15549.13 MW, compared to 442 GW of the country. Of the total installed power capacity, 13,567 MW was contributed by thermal power, 1,982.13 MW was contributed by hydro power and renewable power together. West Bengal government's ministry of power, in its report, enumerates individual power generating stations in West Bengal along with their respective locations and generating capacities while mentioning the total installed capacity as 9,805 MW. As of 2024, 100% of households were fully electrified.

Communication and transportation
, West Bengal has a total road length of 283865 km, with a road density of 1.04 km per km2. Of this, national highways constitute 3674 km and state highways 3612 km., the central government mulled augmenting the state's national highways' length by another couple of thousand kilometres in a bid to supplement to India's plan of seamless BBIN connectivity through Nepal, Bhutan, India, and Bangladesh, subject to availability of land, by investing in the tunes of US$4–5 billion.

Railways
The Eastern Railway zone, South Eastern Railway zone and Northeast Frontier Railway zone of Indian Railways run operations in West Bengal. At the end of 2023-24, the route length in West Bengal was 4,203 km of which around 4,016 km has been converted to broad gauge and around 3,906 km has been electrified, the running track length was 7,122 km and the total track length was 10,466 km, with the number of stations exceeding 800. Kolkata Metro railway is the newest zone of the IR with four operational lines of total length of about 60 km., various other metro links of approximately 74 km route length are underway in different phases of construction in Kolkata.

Ports
Kolkata is a major river-port in eastern India. The Kolkata Port Trust manages both the Kolkata docks and the Haldia docks. There is passenger service to Port Blair on the Andaman and Nicobar Islands and cargo ship service to ports in India and abroad, operated by the Shipping Corporation of India. Kolkata Port handled 65.660 million tonnes (mt) of traffic in 2022-23, around 12.86% higher vis-a-vis that handled during previous fiscal. Kolkata Dock System, the first major dock formally commissioned in 1870, handled cargo traffic of 17.052 mt in 2022-23, registering a significant growth of 11.46% over the previous year. Haldia Dock Complex, the 1st green port of the country in 2015, handled 48.608 mt in 2022-23, recording growth of 11.8% over the last year. During 2022-23, 6,75,904 Container TEUs were handled at the Port vis-à-vis 7,35,195 TEUs during 2021-22. Total containerised tonnage handled at SMP, Kolkata was 10.59 million tonnes in 2022-23 vis-à-vis 11.8 million tonnes in 2021-22. Kolkata Dock System handled 5,68,722 TEUs in 2022-23 compared to 5,69,783 TEUs in 2021-22, recording a marginal decline. In 2019-20 Kolkata Dock System achieved the highest ever container throughput of 6,75,439 TEUs. Haldia Dock Complex handled 1,07,182 TEUs in 2022-23 vis-a-vis 1,65,412 TEUs in 2021-22.

Kolkata Port ranked 1st in terms of coking coal & other coal handling amongst major ports of India.

Inland waterways
The 560 km long Haldia-Farakka stretch in West Bengal is part of the stretch of Ganges between Haldia and Prayagraj declared as the National Waterway 1. Also a 91 km long stretch of the National Waterway 5 is within West Bengal. West Bengal government has sought to build infrastructure to begin sustained fuel efficient cost efficient and eco-friendly shipping operations for cargo transportation and tourism, passenger traffic as well along 12 rivers in West Bengal which can reduce congestion on roads. These rivers that has been identified for national waterways services, are the Prayagraj-Haldia stretch of the Ganga Bhagirathi Hooghly river, Ajay River (96 km), Mayurakshi River (110 km), Damodar River (135 km), DVC canal (130 km), Dwarakeswar River (113 km), Ichamati River (634 km), Jalangi River (131 km), Rupnarayan River (72 km), Subarnarekha River (314 km) and Sunderban Waterways (201 km).

Telecommunications
As of end of March 2024, as per statistics published in press release of TRAI, there were 81.567 million wire-less (mobile phone) subscriptions (including 23.667 million with 89.65% VLR or active connections in Kolkata service area and 57.9 million with 94.63% VLR or active connections in rest of west Bengal service area) compared to over 1165.5 million wire-less connections in the whole country with VLR or active connections of 90.75% and 1.522 million wire-line subscriptions (including 1.01 million in Kolkata and 0.512 million in rest of West Bengal) in West Bengal (with a total state-level tele-density of 82.51% ) compared to over 25.036 million wire-line connections in the whole country (with nationwide total tele-density of 85.69%) while as of April 2016 the number of broadband subscriptions in the state were arbitrarily estimated to be around 11 million compared to that of whole of India with over 151.09 million broadband connections. VSNL has its international gateway and earth station in Kolkata. International connectivity is provided through VSNL and five STPI (Software Technology Parks of India) earth stations in Kolkata, Durgapur, Kharagpur, Haldia and siliguri. Digha has been selected as the cable landing station for the submarine cable laying project connecting India and South East Asia. BSNL has an optical fiber network of 15000 km route in West Bengal. Reliance group's Jio Infocomm has laid 4500 km of optical fiber network in the state for its 4G network. Under National Optic Fibre Network (NOFN) mission, optical fibre cable will be laid in 341 blocks covering most of the gram panchayats in West Bengal.

Aviation
Spread over 2640 acres at Dum Dum in Kolkata, the largest in eastern India, the newly modernised Netaji Subhas Chandra Bose International Airport is the sixth busiest international airport in India in respect of aircraft movement (after Delhi, Mumbai, Bangalore, Hyderabad and Chennai). It has two asphalt runways, the primary one extended by 700 meters (3627 × 46m) and upgraded to CATIIIB, and the secondary one (3190 × 46m) upgraded to CATII ILS standards. Its terminal is a new and sprawling L-shaped six-level integrated terminal of over 2,510,000 sq ft inaugurated in 2013, able to handle 25 million passengers per annum. It includes check-in counters that use CUTE (Common User Terminal Equipment) technology, 78 immigration counters, 12 customs counters, passenger lounges provided by Air India and Jet Airways, 18 aerobridges, 57 remote parking bays, 2 underground two-leveled carparks and car parking facilities in landscaped area capable of handling 5000 cars. The airport has a Centre for Perishable Commodities (CPC), two luxury hotels and a shopping mall.

In the fiscal year April 2023 to March 2024, the airport handled 1,40,879 aircraft movements including 20,078 international aircraft movements, 19.784 million passengers (including 2.4 million international passengers and 17.31 million domestic passengers), 1,51,626 metric tonnes of freight. Between the 1940s and 1960s, major airlines such as Aeroflot, Air France, Alitalia, Cathay Pacific, Japan Airlines, Philippine Airlines, KLM, Pan Am, Lufthansa, Swissair and SAS operated from the airport. With the advent of longer haul aircraft and the socio-economio-political degeneration of the state during the 1960s, several airlines gradually discontinued operations there. The withdrawal of Lufthansa's service to Frankfurt in 2012 left Kolkata with no direct flights beyond Asia. Kolkata airport is to undergo the execution of Phase 2 of the expansion plan which primarily involves the construction of an 86-meter ATC Tower. Additionally, the current Kolkata Metro expansion plans include two new lines to the airport for better connectivity.

Bagdogra International Airport, Siliguri is another significant airport in the state. It serves as the gateway to North-east India and countries like Bhutan, Nepal and Bangladesh. In the fiscal year April 2023 to March 2024, the airport handled 20,838 aircraft movements including 434 international aircraft movements, 3.12 million passengers (including 21,137 international passengers and 3.09 million domestic passengers), 8,445 metric tonnes of freight. Kazi Nazrul Islam Airport, Durgapur country's first private greenfield aerotropolis project spread over 650 acres, under Bengal Aerotropolis Projects Limited (BAPL) co-owned by Singapore-based Changi group, conceived in 2006–07 to be a domestic/international airport with handling capacity of 1 million per annum that can be expanded to 2.5 million per annum in future, officially commenced operations in 2015 at Andal, Durgapur 185 km away from the state capital Kolkata. In the fiscal year April 2023 to March 2024, the airport handled 3,234 aircraft movements, 0.51 million passengers, 491 metric tonnes of freight.

Industry
, the state has 22 formally approved special economic zones (SEZ). Of these, 17 are related to information technology (IT) or IT, enabled services (ITES).

Economic indices


As per the state budget presented in the state legislative assembly on 8 February 2024, West Bengal's nominal GSDP at current prices has risen to inr 18800000000000 in the year 2024-25, the average INR to US$ exchange rate in that year being INR 78. West Bengal's per capita nominal GSDP at current prices for the economic year 2022-23 is inr 141373. In the year 2024-25, it is expected to grow to inr 188467.

In terms of nominal net state domestic product (NSDP) at factor cost at current prices (base year 2011-2012), West Bengal was the sixth largest economy in India, with an NSDP of inr 18800000000000 in 2024-25 and in terms of nominal gross state domestic product (GSDP) at current prices, the state had GSDP of inr 13970000000000 in the economic year 2022-23 as mentioned by Reserve Bank of India. In 2023-24, the tertiary sector of the economy (service industries) was the largest contributor to the gross domestic product of the state, contributing 54.13% of the state domestic product compared to 18% from primary sector (agriculture, forestry, mining) and 27.87% from secondary sector (industrial and manufacturing). At a compound annual growth rate of 15.2%, the tertiary sector has been the fastest growing among the three sectors from 2004–05 to 2009–10. The growth has been driven by trade, hotels, real estate, finance, insurance, transport, communications and other services.

The state's total financial debt that stood at inr 1918000000000 swelled to inr 3050000000000 at the end of 2015-16 and is estimated to further grow to inr 6932000000000 at the end of 2024-25, although as a percentange of GSDP it is expected to decrease to about 36.88%.

Multidimensional poverty
According to a report released by NITI Aayog in 2023 on Multidimensional Poverty Index, West Bengal had a poverty rate of 11.89% as compared to 14.96% at national level in the years 2019-21. It further decreased to 8.60% in 2022-23 (projected) as compared to 11.28% at national level. Several socialist schemes have helped to reduce poverty and maintain equality of income in the state. The district-wise values of multidimensional poverty is as follows-

Foreign direct investment
Under the overall guidance and policies of the government of India, the West Bengal government welcomes foreign technology and investments as may be appropriate for the needs of the state and is mutually advantageous. Foreign direct investment has mostly come in the manufacturing and telecommunication sectors. According to the Department for Promotion of Industry and Internal Trade, Government of India, West Bengal attracted a cumulative FDI investment of ₹12,398.46 crores (US$1,609.67 million) from October 2019 to March 2024.

Exports
West Bengal is one of the country's leading exporters of finished leather goods. In 2023-24, the state accounted for around 6% of the country's exports of leather and leather products. The state accounted for around 70% of India's dried flower exports in 2008–09. The state is also a leading exporter of shrimps and tea.

However, the rapid industrialisation process has given rise to debate over land acquisition for industry in this agrarian state. NASSCOM–Gartner ranks West Bengal power infrastructure the best in the country.

Per capita income
In the year 2022-23, the per capita income of West Bengal was calculated to be inr 141373 at current prices. It is expected to grow to about inr 188467 in the year 2024-25 by extrapolating the values according to GSDP growth rate. The latest district-wise values of per capita income available was of 2013-14. They are shown as below and their values extrapolated to 2022-23 and 2024-25 values respectively.