Kolkata's Economic Revival Crucial to Bridging India's East-West Divide, Says PM's Economic Adviser
NEW DELHI — The economic rejuvenation of Kolkata is critical to addressing the widening wealth gap between India’s eastern and western regions, according to Sanjeev Sanyal, Member of the Economic Advisory Council to the Prime Minister (EAC-PM).
Speaking on Wednesday at a National Stock Exchange (NSE) event focused on the relative economic performance of Indian states, Sanyal dismissed the frequently debated North-South economic divide as the country's primary challenge. Instead, he argued that the nation's most pressing economic disparity is structural and geographic, spanning an East-West axis.
“The first is the much-talked-about North-South divide, which is not the real economic crisis in the country. It is actually an East-West divide where the eastern half of India is distinctively poorer than the western half of the country,” Sanyal stated.
He pointed out that India's macroeconomic growth trajectory is predominantly fuelled by a select few high-performing urban hubs. For the eastern half of the country to accelerate its development and catch up with western states, the establishment of a robust, high-growth urban centre is imperative. Sanyal identified Kolkata as the natural candidate for this role.
“Kolkata already has some clusters and a long, glorious history. Despite the last half-century of decline, I would argue that the secret to reviving the eastern half of India must be about the revival of Kolkata, specifically,” Sanyal remarked.
Parallel to these macroeconomic observations, the corporate sector is indicating a cautious optimism regarding West Bengal’s investment climate, contingent upon political stability and regulatory predictability. Sanjiv Goenka, Chairman of the RPSG Group, expressed hope following recent political shifts.
Speaking to NDTV after emerging election trends, Goenka noted that a stable government—specifically pointing to the prospect of a BJP-led administration—could help restore investor confidence. He emphasised the necessity of cultivating a business-friendly ecosystem to reverse the outward migration of Bengali talent and attract fresh domestic and foreign capital into the state.
Goenka, who was born and raised in Kolkata and holds significant business interests in the region, stressed that policy consistency remains the cornerstone of industrial growth. He cautioned that frequent regulatory changes or sudden policy reversals severely deter long-term corporate planning and investment decisions.
Furthermore, the industrialist flagged the urgent need for deep structural reforms within the state's governance framework. He specifically criticised outdated legislative measures, such as the urban land ceiling regulations, describing them as obsolete barriers that actively hinder industrial expansion and real estate development.
The convergence of policy advisory highlighting Kolkata's strategic macroeconomic importance and corporate leaders demanding structural reforms underscores a critical juncture for West Bengal. Economists note that unlocking the region's potential requires transitioning from reliance on historical legacy to implementing actionable, consistent, and investment-friendly governance.
Our Final Thoughts
The narrative surrounding India's regional economic disparity is rightly shifting from a North-South debate to a stark East-West reality. Sanjeev Sanyal’s focus on Kolkata as the linchpin for eastern India's growth is a pragmatic assessment of urban economics; high-growth hubs invariably pull surrounding regions upward. However, as industrialist Sanjiv Goenka correctly identifies, this geographical potential remains locked without policy stability and the removal of archaic regulations. For Kolkata to reclaim its status as a premier economic powerhouse, the state administration must align with corporate expectations to foster a transparent, predictable, and modern business climate.