There was a time when West Bengal did not need to advertise itself as an investment destination. Capital came looking for it. The industrial geography of early post-Independence India ran through the state’s coalfields, steel plants, jute mills, ports, and engineering hubs. Kolkata-Howrah, Durgapur, Asansol, these were not peripheral zones but central arteries of India’s economic bloodstream.
That inheritance, however, did not decay overnight. It was dismantled over decades, through a slow accumulation of political choices that privileged ideology over productivity, mobilisation over modernisation, and slogans over skills. By the time the Trinamool Congress displaced the Left Front in 2011, much of Bengal’s industrial muscle had already gone. The mills had fallen silent, heavy engineering had withered, and labour militancy had long outlived the economic conditions that once justified it.
The 2011 election was therefore framed as a moment of reset, a chance to move beyond the stagnation of the past. What followed instead was not renewal, but a more accelerated form of economic retreat.
The Post-2011 promise and the quiet exodus
One of the least contested indicators of economic confidence is corporate location choice. Between April 2011 and March 2025, 6,688 companies moved their registered offices out of West Bengal, according to data submitted by the Ministry of Corporate Affairs in response to questions in the Rajya Sabha. These exits were not evenly spread across time. They peaked in the mid-2010s, with 2017-18 alone witnessing over a thousand corporate departures.
The state government has often responded by pointing out that overall company registrations have risen. But critics argue that registrations are a thin metric if they do not translate into large-scale, job-generating enterprise. A proliferation of paper entities cannot compensate for the exit of medium and large firms that anchor supply chains, train workforces, and create multiplier effects.
The net outcome is difficult to deny: while some small firms may continue to operate or register locally, many enterprises with scale and ambition have chosen jurisdictions with more predictable policy environments, stronger contract enforcement, and fewer informal barriers.
Academic research has mirrored this diagnosis. A political economy study on Bengal’s growth slowdown notes that post-2011 economic performance has lagged both the national average and comparable states. The analysis identifies corruption, weak non-farm sector expansion, and governance constraints as persistent brakes on growth.
Informality, Intimidation, and the disappearing middle
Perhaps the most under-discussed casualty of this environment has been the informal and unincorporated sector. According to the National Statistical Office’s surveys, West Bengal lost roughly three million informal-sector jobs between 2015-16 and 2022-23. In contrast, states like Maharashtra expanded employment in the same period.
This matters because unincorporated enterprises, small manufacturing units, workshops, and service providers absorb vast numbers of semi-skilled and low-skilled workers. When they shrink, the damage is not abstract. It is local and immediate, particularly for young people entering the workforce.
Analysts and entrepreneurs point to a familiar cluster of obstacles: informal levies that raise operating costs, syndicate control over logistics and procurement in certain districts, and the difficulty of scaling from a micro-enterprise into a formal medium-sized firm without political mediation. These factors do not operate uniformly across the state, but their presence in key industrial belts has shaped Bengal’s reputation as a high-risk, low-predictability destination.
The consequence has been a hollowing-out of the economic middle: large firms leave, small firms struggle to grow, and workers are left with shrinking options.
Missing Every Growth Wave
What distinguishes Bengal’s experience from that of other states is not merely decline, but absence. Over the last two decades, India has witnessed three major growth waves: information technology and software services, modern manufacturing integrated into global supply chains, and a startup-driven services economy. Bengal meaningfully captured none of them.
Tamil Nadu and Maharashtra built manufacturing ecosystems. Karnataka and Telangana became magnets for IT and startups. Even states once considered peripheral reoriented governance around infrastructure, skilling, and investor confidence. Bengal, by contrast, leaned increasingly on cash transfer schemes and welfare optics, without pairing them with structural job creation.
The results are visible in migration patterns. Census data shows West Bengal among the leading labour-supplying states. Between 2001 and 2011 alone, nearly six lakh people migrated out in search of work. Since then, the trend has only deepened, driven by informal job losses and the absence of high-quality employment in industry, IT, and services.
Graduates leave for Bengaluru, Hyderabad, Pune, and Delhi-NCR. Informal workers follow, chasing daily wages that are often multiples of what they earn at home. Bengal exports labour not because it lacks talent, but because it lacks the political architecture to retain it.
The political economy of dependency
What has replaced industry is not an alternative growth model, but a politics of dependency. Cash assistance programmes have expanded, but without a corresponding expansion of productive capacity. Welfare, detached from employment, has become a substitute for economic opportunity rather than a bridge to it.
This is not merely a fiscal issue; it is a political one. A system that manages poverty without reducing it creates incentives for control rather than reform. Law and order becomes negotiable. Governance becomes personalised. Economic policy becomes reactive. In such an environment, fear often succeeds where aspiration fails.
Why the question of change has become inevitable
Bengal’s crisis today is not cyclical. It is structural and self-reinforcing. A state that once shaped India’s economy now struggles to hold on to its own workforce. Young Bengalis increasingly measure success by exit timelines, not local opportunity.
The debate, therefore, is no longer about nostalgia or party loyalty. It is about whether Bengal wants to remain a labour-exporting economy or re-enter the national growth story as a producer of value.
Across India, the pattern is difficult to ignore. States governed by the Bharatiya Janata Party have emphasised manufacturing clusters, infrastructure-led growth, and law and order as economic enablers. Welfare has not disappeared, but it has increasingly been tied to employment, skilling, and asset creation rather than permanent dependency.
This does not make the BJP a slogan or a saviour. It makes it, increasingly, a structural necessity for a state trapped in political equilibrium that rewards stagnation.
The choice before Bengal
Bengal’s decline was not inevitable. Nor is its recovery impossible. But recovery requires political change before economic reform can take root. It requires a shift from intimidation to institution-building, from optics to outcomes, and from dole-based politics to dignity through work.
The choice is stark. Continue as a labour-supplying state governed by patronage and fear or reclaim the ambition that once made Bengal an economic engine. Jobs, not doles. Growth, not goonism. Not as a slogan, but as a condition for survival.
Author Advocate Sanhita Pandey is an Advocate of the Supreme Court of India, with legal reasoning, constitutional insight and command over public law. A political enthusiast with a deep interest in governance, state capacity and institutional reform, closely tracking India’s political economy, national security, and policy evolution.
