From Powerhouse to Exodus: The Fall of Bengal’s Industry

Paromita Das

New Delhi, 29th July: Once hailed as the industrial and intellectual nerve centre of Bharat, West Bengal today stands as a shadow of its glorious past. From the clanking factories of Howrah to the buzzing commercial streets of Kolkata, the state once powered the nation’s economy with its jute mills, steel plants, and thriving port city.

But under Mamata Banerjee’s decade-long reign, Bengal’s rich legacy has been steadily eroded—consumed not by time, but by politics. Her brand of populist, anti-industry governance has gnawed away at the state like a silent termite, leaving behind only hollow slogans and shuttered gates. The flight of industry from West Bengal is not merely a shift of economic activity—it’s a tragedy of missed potential and self-inflicted wounds.

Despite possessing a strategic location, abundant natural resources, and a skilled workforce, Bengal has become increasingly isolated from Bharat’s economic mainstream. A stark reality is sweeping across this eastern belt: over the last decade and a half, more than 6,000 companies have exited West Bengal, with over 2,200 departures since 2019 alone. These firms have relocated to states like Maharashtra, Delhi, Uttar Pradesh, and Gujarat, drawn by more favorable industrial climates. In contrast, West Bengal—once an industrial powerhouse—now struggles to retain its enterprises, despite sporadic announcements of investment on paper.

From Industrial Glory to Steady Decline

West Bengal’s industrial exodus didn’t begin with Mamata Banerjee’s government, but her tenure appears to have accelerated the decline. Under the Trinamool Congress (TMC), the cumulative departures rose steadily: roughly 1,027 companies between 2017–18, 918 in 2016–17, and 869 in 2015–16. While the Left front era laid the groundwork for industrial discord, Mamata’s anti-industry posture and failure to stem law and order issues reinforced the exodus.

Meanwhile, states like Maharashtra (1,300 companies), Delhi (1,297), and Uttar Pradesh (879) have absorbed fleeing businesses. Chhattisgarh, Gujarat, and Rajasthan also attracted more than a thousand companies each. These states offered simpler regulatory processes, tax incentives, and even land at nominal cost—a sharp contrast to West Bengal’s increasingly unattractive environment.

Promises vs. Reality: The Investment Mirage

Amid this exodus, West Bengal’s government repeatedly touted large investment pipelines—₹39,000 crore in proposals during January–November 2024 alone, placing it third nationwide in announcements. But the truth unearthed by central data tells a different story. Actual investments amounted to just ₹3,735 crore by November 2024, exposing a gulf between promise and performance.

In comparison, Uttar Pradesh drew ₹71,000 crore, while West Bengal managed a meager ₹15,000 crore in the period from 2020 to 2024—lagging even behind smaller neighbors like Jharkhand. Shuttered factories—Britannia’s biscuit plant and multiple jute mills among them—underline the deeper malaise. The Singur debacle, in which Tata Motors abandoned the Nano plant due to political resistance, remains emblematic of Bengal’s historic tragedy: hostility toward industry dressed as populist politics.

Policy Rollback: Driving Industries Away

April 2025 marked a decisive blow. West Bengal abolished all industrial incentive schemes established from 1993 to 2021. Subsidies for land, utilities, and other concessions were terminated, under the stated goal of redirecting funds to social welfare. But the impact is tangible: cement companies and legacy firms such as Dalmia have already absorbed cumulative losses of ₹500 crore.

Contrast this with policy shifts elsewhere: some states now offer industrial land for ₹1, build dedicated industrial parks, and launch investor-friendly reforms. In Bengal, the rollback signals a retreat—from economic promotion to ideological withdrawal.

The Comparative Gap: How Other Cities Fare

Cities in Maharashtra, Gujarat, and UP have logged continued industrial growth. Mumbai and Ahmedabad thrive as manufacturing hubs; UP’s industrial corridors expand aggressively. Meanwhile, Kolkata, formerly one of Asia’s major industrial centers, suffers from closure of factories and aging infrastructure. Industrial share of Bharat’s GDP from West Bengal has shrunk from over 10% in the 1960s to just 5% today—while other states continue gaining ground.

This divergence reflects not just policy smothering, but a cultural shift. In states like Gujarat, investors find not just red tape, but support and infrastructure. In Bengal, the climate is unpredictable—a premium burden on those who want to stay.

A Legacy Undermined

West Bengal’s industrial departures are not merely numbers—they signal a fundamental breakdown of governance and vision. The state is passing through economic stagnation, its joblessness increasing, its youth migrating, and its institutional trust eroding.

Political theater, such as resisting industrialization for populist credentials, may win votes in the short term. But the cost is long-term relevance. Investment announcements on glossy stages can fool headlines but not ledgers. Without stability, predictability, and support, no business can commit.

If Bengal continues to close doors, its status as a national economic engine will be sealed—not by external forces, but by its own choices. That is a tragedy for millions in the state and a stumbling block for the region.

The Road Ahead for Bengal

West Bengal stands at a crossroads. Decisions made in the coming years—whether to remain antagonistic or adopt pro-investment reforms—will shape its future. If the state revives industrial policies, restores investor trust, and resolves law & order issues, not only can it reclaim its industrial standing, but its fortunes may again align with its population potential.

But without change, Bengal’s decline may deepen. It may become a cautionary tale—of political populism that sacrificed economic progress, of promise unrewarded, and of a demographic-rich state crippled by policy choices. The longer the exodus continues, the clearer the message: industrial flight is not merely a statistic—it’s a signal, and Bengal must respond.