Economy of Kolkata
Kolkata is the main business, commercial and financial hub of eastern India and the main port of communication for the North-East Indian states, It is one of the most important metros of India. Kolkata is home to India's oldest, and also India's second-largest stock exchange company (bourse) – The Calcutta Stock Exchange. Kolkata is home to a major port, an international airport and many nationally and internationally reputed colleges and institutions aimed at supplying a highly skilled work force. Kolkata is also home to India's and South Asia's first metro railway service – Kolkata Metro.
There are a few of the oldest and front line banks and PSUs in India—such as Uco Bank, Allahabad Bank, United Bank of India and Tea Board of India—were founded and is headquartered in Kolkata. The oldest operating photographic studio in the world, Bourne & Shepherd, is also based in the city. The Standard Chartered Bank has a major branch in Kolkata. Kolkata is also the headquarters of Botanical Survey of India and Zoological Survey of India and many more organisations and companies. Moreover, due to the recent efforts of the Government of west Bengal as well as the people of kolkata the economy is looking to rise to even greater heights.
Economic history and recent developments
Kolkata was the capital of the British Indian Empire until 1911. Throughout British Raj, the city was a major port and commerce center in world economy. The Partition of India in 1947 was a major blow to the once flourishing economy during the world wars, it removed most of the hinterland, cutting down the supply of the human resource and a took away a huge portion of its market. Also the huge inflow of refugee from East Pakistan, Bihar, Jharkhand was a major drain to the city's infrastructure which was inadequate for the population boom. In the 1970s, the city saw a predominance of the trade-union movements which led the investors to flow out of the state to other newly emerging destinations in India. As the investors lacked trust in the newly formed communist government, the lack of capital destroyed most of its small-scale industries like foundrys and tool casting.
Since the late 1990s, Kolkata has managed to board the all-India bandwagon of buzzing economic sectors like information technology (IT) and business process outsourcing (BPO), along with a good pace of development matching all India average with the liberalization of the Indian economy. In 2009, Kolkata was ranked the hardest of 17 Indian cities in which to do business by the World Bank.
Once, Bengal was considered as the 'weaving hub of the globe'. A variety of hand-woven cotton cloth was shipped to various countries of East Asia through the Bay of Bengal using the river routes of Ganga, Irrawaddy and Mekong (GIM) to enter into the domestic markets of this region and beyond. Strong trading ties paved the way for cultural ties and vice versa. Moreover, parts of undivided Bengal and the North Eastern states of India were once included in the old Arakan kingdom which is now a part of Myanmar. Various races of the North Eastern states of India also share their ethnic and cultural lineage with the people of Thailand and Myanmar.
In addition to these, this GIM region is part of a huge ecological hotspot which can provide sustainable livelihood to its inhabitants, if utilised properly, for the next few centuries. The Indo-Burma hotspot comprises the Southeast Asian nations of Vietnam, Thailand, Cambodia, Laos, Myanmar, portions of Eastern and Northeastern India and Southern China. It follows along the coast extending across thousands of miles and includes the islands of the South China Sea, the Gulf of Thailand, Andaman Sea, and the Bay of Bengal. This area enriched with diversity is bordered by the Himalayan hotspot to the north and the Sunderland hotspot to the south. But these ethnic, cultural and ecological commonalities have failed to boost trade among the various trading blocs, namely, the Association of South East Asian Nations (ASEAN)-India, the Mekong Ganga Cooperation (MGC), the Bay of Bengal Initiative for Multi-sector Technical and Economic Cooperation (BIMSTEC) and the India Myanmar Thailand Trilateral Cooperation (IMT) functioning in this vast region. Intra-regional trade figures for 2015 suggest that even after one-and-half decades of India's 'Look East' (now 'Act East') policy, initiated in 1991, as a counter initiative to check China's growing influence in the region, intra-regional trade among these blocs has not witnessed a significant growth. Intra regional trade figures for ASEAN-India, MGC, BIMSTEC, IMT for the year 2015 (2000) were 22.92 per cent (23.80 per cent); 3.91 per cent (8.20 per cent), 3.69 per cent (6.70 per cent) and 0.88 per cent (1.66 per cent) respectively. After a gap of over five hundred years, the epicentre of the global economy has realigned itself and shifted to East Asia. Myanmar is located at the 'cross roads' of the world's two largest civilisations, namely, India and China. While this geopolitically important country is a part of all the major trade blocs of this region including the new Bangladesh-China- India- Myanmar (BCIM) initiative, Bengal (more precisely Kolkata) is the ideal place for spearheading India's 'Act East' policy, which aims to re-establish the old cultural and trade links shared with the countries of East and South East Asia. Therefore, cooperation within the IMT region is crucial for the success of India's new strategic and trade initiative. It is thus important to identify the driving and restraining forces towards this flourishing initiative. Driving forces for a stronger cooperation in the IMT region would be rooted in Bengal's capital city Kolkata, in particular, towards forming the Gateway to the East and South East Asia. A few insights would be crucial here. 1. A deep water port built by India in Myanmar's Sittwe which is situated in the old Arakan region is ready to be commissioned. This will open the Kolkata-Mizoram trade route via Myanmar. It has been calculated that transportation via the sea route is more cost effective than utilising only land routes. 2. Myanmar and Thai citizens are mostly practising Buddhists and Bengal still hosts several Buddhist shrines. These religious ties can be leveraged for further strengthening trade and investment relations 3. Being a part of the huge Indo-Burma ecological hotspot, the IMT could cooperate to develop sustainable ecological products for their domestic markets while also tapping on to the global market. Instead of solely relying on western technology and contributing mostly to the global value chain of the TNCs, the traditional technology and knowledge system of the indigenous people of this vast land should be harnessed to the maximum possible extent. 4. During the last few years, the Bengal government has developed a new approach to rediscover its rich weaving techniques, intricate handicrafts, endangered varieties of aromatic and medicinal rice, and traditional food items by bringing all these products under one generic brand called 'Biswa Bangla'. This can act as a model for various regions of South and East Asian countries including Myanmar and Thailand. Investment can be directed to promote traditional goods, agricultural products and sustainable green technologies like hand looms. 5. The present political leadership of Bengal believes in the 'Beauty Contest approach' of inviting investment into the state. It is a considerably better, long term strategy compared to the much maligned 'Race to the Bottom approach' (Tata Nano Project is a case in point) of the previous government. 'Beauty Contest' approach emphasises on making the land more attractive by educating the labour force, investing in infrastructure and developing new institutions. The leadership of West Bengal is precisely doing the same. Major Restraining Forces Political intolerances in India and Myanmar, especially communal conflicts, are intensifying over the passage of time. The limited autonomy given to Indian federal states by the Central government of India is proving to be a major logjam for the proper exploitation of the trade and investment potential of the fast growing East Asian region. The Central government should provide power and authority to the states to negotiate trade and investment deals with other countries. Instead of competitive federalism, the government of India should ideally encourage cooperative federalism. India can no longer afford to ignore China — its powerful next door neighbour in the East. Indian policy makers are still in a state of confusion regarding how to tackle this great power. Though India and China are members of BRICS (Brazil-Russia-India-China-South Africa) and the New Development Bank(formerly,BRICS Development Bank),India is still apprehensive of China's 'One Belt One Road'(OBOR) initiative. A constructive engagement with China is thus essential for a Resurgent Asia. Advantage Bengal After a long period of hibernation, owing to economic liberalisation and better connectivity with the neighbouring nations of Bangladesh, Nepal and Bhutan, Bengal is now on the move again under a new political leadership. Kolkata, the original capital of British India, has rediscovered itself to yet again emerge as the Gateway to the East and South East Asia. West Bengal, the fourth largest state economy in India, growing at 15.64 per cent GVA (2016-17), is leading the growth curve of our Nation. The State is a perfect blend of economic strength and dynamism, with a strong consumer base, policies to usher in women's empowerment, a vibrant industry, a large talent pool, industry friendly stable policies, transparent governance and a strong physical infrastructure. The State government is committed towards inclusive and sustainable development by providing increasing employment opportunities. Moreover, Bengal is equipped with abundant skilled labour and a responsible workforce, and during the last few years 'zero man-days' have been lost. In addition to the Kolkata and Haldia ports, two major deep sea ports are coming up at Sagar Island and Tajpur, along with the Amritsar Kolkata Industrial Corridor (AKIC) aligned to the Eastern Dedicated Freight Corridor, two more international airports, national waterways, ready industrial infrastructure with over 200 industrial estates covering around 20,000 acres and six new theme townships. All of this together, promises to open up new vistas of investment opportunities. The business opportunities that the State of Bengal offers are spread across multi-dimensional sectors including, industrial infrastructure, manufacturing clusters (light engineering, auto ancillaries, leather, gems & jewellery, textile), urban development, agro-based industries (seeds and fertilisers, food processing, animal resource development, fisheries), IT & ITES, transport, tourism, power, skills, healthcare and education, to name a few. Bengal, more precisely Kolkata, has all the ingredients to emerge as the gateway for India to the East and South East Asian countries. The success of India's Act East policy depends on how quickly and effectively this 'city of joy' can position itself in the global trade circuit. Now, the responsibilities lie with the policy makers, trade associations, intellectuals, the media and the political leaders of Bengal to take this possibility and convert it into a reality that would benefit the entire nation, and, in fact, the entire region.
A considerable chunk of Kolkata's lower middle class and middle-class people are self-employed and own or work in small businesses like local grocery stores that sell wide array of merchandise items and FMCG products,retail stores selling clothings,shoes etc. and eateries,small scale industries and other servicing industries.
GDP of Kolkata
According to Brookings Institution, Kolkata's GDP (PPP) on 2014 is $60.447 Billion , converted to GDP (nominal) of $15.90 Billion dollars with a nominal vs. PPP factor of 3.80. In another Pricewaterhouse Cooper's report, as of 2009, Kolkata's economic output as measured by gross domestic product by purchasing power parity as 104 billion US dollars (nominal $27.37 billion US dollars), and ranks third among South Asian cities, behind Mumbai and Delhi. However, As of 2010[update], Kolkata, with an estimated Gross domestic product (GDP) by purchasing power parity of 150 billion dollars, ranked third among South Asian cities, after Mumbai and Delhi. Kolkata's nominal GDP is expected to reach US$169 billion in 2030, with a per capita nominal GDP of US$7,400. In 2015, The Brookings Institution, a U.S. based think tank in collaboration with JPMorgan ranked Kolkata second among all Indian metros and 32nd among 300 major metropolitan economies of the world on overall economic performance for the year 2013-’14. According to this report, With annualised GDP per capita growth of 4.7% and employment growth of 2.5% Kolkata scored over every Indian city, except Delhi.
Major companies whose management operations are based in Kolkata
Some notable companies headquartered in Kolkata include ITC Limited, H R Group, Tata Steel Processing & Distribution Ltd, Coal India Limited, Haldia Petrochemicals, Exide Industries, Hindustan Motors, Britannia Industries, Bata India, Birla Corporation, CESC Limited, IFB Industries, RPG Group, Bengal Ambuja, Linc Pen & Plastics, Philips India, Eveready Industries, Visa Group, Damodar Valley Corporation, India Govt. Mint and Peerless Group, Usha Martin, Rupa Industries, Lux Innerwears, Jai Balaji Group, Orient Airways, Bengal Ambuja, Berger Paints, SIMOCO (First Wireless Equipment and Mobile phone manufacturers from East India), Emami, Eveready Industries, Stewarts & Lloyds of India, and Titagarh Wagons and National Insurance Company.
Among these three of the Forbes Global 2000 listed companies are headquartered in Kolkata, which includes ITC Limited, Allahabad Bank and Uco Bank. Kolkata is also the home to the HQs of the Geological Survey of India Zoological Survey of India, Botanical Survey of India, Hindustan Copper Ltd., Ordinance Factory Board and the Tea Board of India.
Kolkata is an important centre for banking. At present it is headquarters of three large nationalized banks Allahabad Bank, Uco Bank and United Bank of India and a private scheduled bank - Bandhan Bank. Several large financial companies and insurance companies are headquartered in Kolkata including Magma Fincorp, Bandhan Bank, Srei Infrastructure Finance, National Insurance Company. Many Indian banks, multi-national banks and the World Bank have located their Branch offices operations in the city. All main banks from India have their branch office here. Also big financial banks like Standard Chartered Bank, Bank of America and HSBC Bank have office and branches in Kolkata. Bandhan Financial, the largest Microfinance Group in India from Kolkata and 2nd largest of its kind in the World has got RBI nod to set up banks all over India. Bandhan Bank has its Head Office in Kolkata, which is the only bank after independence to be established in the city.
Ease of Doing Business in Kolkata
According to a World Bank Ease of Doing Business report in 2009, Kolkata ranked 17 out of 17 cities surveyed in India, while New Delhi was at 10th, and Bengaluru at 16th. In procedure to start a business, Kolkata ranked 10th. It is to be noted that Kolkata has a process to obtaining trade license in the city which is unique in India. This ranking however has became better as per recent estimates.Kolkata Municipal Corporation (KMC) is the central authority which deals with the processing of new trade licenses and the renewal of the same as well.
HIDCO Bhawan (Narkel Bagan) New Town Kolkata
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|last1=in Authors list (help)
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