Context:

• This article is based on an Editorial “Singur land case: Tata Motors wins, entitled to recover ₹ 766 crore from West Bengal” which was published in the Mint. Recently, Tata Motors Ltd won an arbitration award of ₹766 crore from the West Bengal Industrial Development Corp. Ltd (WBIDC), marking the resolution of a long-standing dispute related to its Singur plant, which was shut in 2008 due to protests against land acquisition.

Richness of the Bengal –  Historical Context

• A Prosperous State: During the 17th century, Bengal was a prosperous state having a high GDP contribution and was richer than Britain and Egypt. 
• Famous for Silk and Cotton: Historically, Bengal was the main silk-weaving center of India and famous for cotton. This prosperity was evident by many  journalists and travelers.
• Birthplace of various Famous Personalities: Raja Ram Mohan Roy, Rabindranath Tagore, Swami Vivekanand, Netaji Subhash Chandra Bose, etc.
• Highest Nobel Prize Winner State: Amartya Sen, Rabindranath Tagore, Abhijeet Banerjee, etc.

Also read: Revolutionary Activities In Bengal Province

Decline of the Richness of Bengal – Key Points

• Battles: After the Battle of Plassey (1757) and the Battle of Buxar (1764), Britain started controlling the economy of the State.
• Disasters: Drought of 1768-69, famine of 1770, and spread of smallpox (1770) in which one-third of the population died.
• Policies: The Permanent Settlement of 1793 started by the Lord Cornwallis faced the criticism that the farmers had to pay the revenue fixed by the Britishers in all situations and for its pay they were stuck in loan-debt trap, and if unable to pay , their land was confiscated.
• Partition of the State: 
  • In 1874, Assam was detached from the administrative control of Bengal, which is a famous tea producing region. 
  • On 22 March 1912, both Bihar and Orissa divisions were separated from the Bengal Presidency and Odisha is a mineral rich region.
  • After 1947, Jute mills remained in West Bengal but jute producing regions were under East Pakistan.
    • Shortage of Raw Material: The Partition of India disrupted the supply of raw materials like jute and tea to Kolkata, impacting the industries in West Bengal.
• Impact on existing Industries: The emergence of nylon as a primary packaging material and the rise of cheaper tea exporters affected West Bengal’s jute and tea industries.
• High Politicization: High communist thinking led to exploitation of industries, strikes were declared in the state due to the Vietnam war (1955- 1975), etc.
• Refugee Influx: The influx of millions of refugees (1971 War) burdened the state’s economy.
• Subsidized Mineral Transport: The government policy of promoting industrialization resulted in the shift of production from mineral-rich states like West Bengal.

What challenges did West Bengal face during the Liberalization Era?

• Per Capita Income Gap: Liberalization in the 1990s created more opportunities in other states, widening the per capita income gap between West Bengal and the national average
• Lack of Diversification: The lack of diversification in industries hindered its growth compared to other states.
• Centre-State Differences: Differences between the state’s Left Front government and the market-liberal government at the Centre affected West Bengal’s economic progress.

West Bengal Land Reforms and Rural Economy

• Operation Barga: The Left Front government’s land reforms and improved irrigation contributed to the growth of the rural economy.
• Rise in Income: As a result of land reforms, West Bengal experienced a steady rise in per capita income.
  • However, the state’s de-industrialization continued under the Left government and missed the opportunity to become an IT hub.