In 2024, West Bengal’s economy displayed a mixed narrative of impressive growth and persistent challenges, with both opportunities for expansion and looming concerns about its business environment. The state’s Gross State Domestic Product (GSDP) is projected to grow by 10.5% in the 2024-25 fiscal, well above the national average of 7.32%, solidifying West Bengal’s position as the fourth-largest economy in India, according to Shashi Panja, the state's Industries Minister.

One of the key contributors to this strong growth was the manufacturing sector, which achieved a robust 7.8% growth, surpassing the national average. This positive trend was further supported by the influx of investments across various sectors, with a focus on industries like IT, steel, and polymer manufacturing.

A highlight of the year was the inauguration of Infosys' ₹426 crore development centre in New Town, expected to employ over 4,000 people and focus on cloud computing and digital services. Chief Minister Mamata Banerjee heralded this project as a “New Year gift to West Bengal”, underscoring the state’s potential to attract more IT investments. Moreover, the state government is pushing forward with the 200-acre Silicon Valley project in New Town, which aims to attract ₹27,000 crore in investments and create 75,000 jobs, further positioning Bengal as a key IT hub in India.

In addition to IT, the state has seen significant developments in its manufacturing sector. Two major projects with a combined investment of ₹2,100 crore were launched, including Shyam Steel’s integrated steel facility and Dhunseri Poly Films’ venture. These projects are expected to create over 5,000 jobs, contributing significantly to Bengal’s industrial growth.

The state’s Micro, Small, and Medium Enterprises (MSME) sector also demonstrated resilience, with an anticipated 7.7% increase in credit disbursal for the fiscal year 2024-25, building on last year’s achievements. This growth reflects the state’s ongoing efforts to support small businesses, a vital part of its economy.

West Bengal also witnessed significant strides in data infrastructure. NTT completed the first phase of its data centre campus in Kolkata, while CtrlS Datacenters announced a ₹2,200 crore investment to develop a data centre, boosting the state’s tech infrastructure.

However, despite these positive developments, West Bengal’s economic journey in 2024 was not without its challenges. A concerning trend emerged with the continued corporate relocations from the state. Between 2019 and 2024, over 2,227 companies, including 39 listed firms, shifted their registered offices out of West Bengal. This shift has raised concerns about the business environment in the state, as many companies seek more investor-friendly locales like Gujarat and Karnataka.

The state’s declining contribution to India’s national GDP, which stood at 10.5% in 1960-61 but dropped to 5.6% in 2023-24, further highlights the need for policy reforms. Experts warn that if West Bengal fails to address issues like administrative ease, operational efficiency, and cost structures, it risks losing even more businesses to other states. A senior industry chamber executive stressed that West Bengal needs to act swiftly to ensure it remains an attractive destination for businesses and investments.

Fiscal management also remains a challenge. A report by CareEdge Ratings pointed out a growing imbalance between the state’s revenue and capital expenditures, with revenue expenditure increasing by 13.5% year-on-year, while capital expenditure grew by only 7.7%, falling short of budgeted targets. The state’s fiscal deficit for the first half of FY'25 stood at 3.7%, below the targeted figure set by the 15th Planning Commission.

One of the major infrastructure projects, the Tajpur deep sea port, failed to progress. The state could not re-tender for fresh bids nor allow the Adani Group, the previous bidder, to proceed with the project. This delay has raised questions about the state’s ability to implement large-scale infrastructure projects on time.

Additionally, geopolitical developments, particularly the political situation in Bangladesh, may pose challenges to West Bengal’s economy. Experts warn that if Bangladesh forges closer ties with Pakistan, it could reduce trade with India, impacting Bengal’s exports.

Looking ahead, Mamata Banerjee is focused on the Bengal Global Business Summit scheduled for February 2025, aiming to attract more investments and showcase the state as a dynamic business hub. Diplomatic meetings with representatives from over 42 countries have already been held to prepare for the event.

Despite these challenges, the future of West Bengal’s economy depends on its ability to adapt, reform, and strategically plan for sustained growth. Economists emphasize that continued reforms, including improvements in ease of doing business and the elimination of local political interference, will be crucial in ensuring the state’s future economic success.

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