Bengal, count plants, not promises: The real test of its industrial comeback

Last week: West Bengal finance minister Swapan Dasgupta stated that the Urban Land (Ceiling and Regulation) Act 1976 has to go. That reform would be instrumental, he said, in unlocking land for development and attracting fresh investments. This, and other measures, are on the anvil for the 5-mth-old BJP government's plans to put the state on an industrial path.

Bengal's industrial history is unusual, not because it started late but because it started so early and lost so much. Five decades of Left and Trinamool politics squandered the inheritance of one of India's earliest cotton mills near Calcutta, car-making by Hindustan Motors at Uttarpara, locomotive-making at Chittaranjan, steel at Durgapur....

Also Read: West Bengal finance minister says Urban Land Act has to go


The new government's industrial policy, due before Durga Puja next week, promises land pooling and direct purchase, a ₹5,000 cr investment framework with incentives linked to employment, and faster clearance for projects above ₹100 cr. Investors read a state's promises off its balance sheet. Fiscal and legal capacity are complements. States that build one tend to build the other. The first tells an investor whether a state can pay, the second whether its commitments can be enforced. Bengal offers evidence of weaknesses in both.

In 2025, the previous government legislated away 10 industrial incentive schemes dating back to 1993. NITI Aayog's 2026 Fiscal Health Index gives Bengal a score of 23.8, ranking it 16th out of 18 major states. The 16th Finance Commission has also cut its share in the divisible pool from 7.52% to 7.22%.

Where states begin with unequal endowments, stronger states can compete harder, while weaker ones have less incentive to do so. The question is not whether Bengal can announce incentives. It's whether it can credibly commit to paying them.

Odisha began this century in a deeper fiscal hole. Today, it tops the same index with a score of 73.1. In 2001-02, Odisha ran a revenue deficit of 5.48% of GSDP, a fiscal deficit of 7.68%, and debt of 46.48%. Its response included a white paper, a recruitment freeze and abolition of vacant government posts, tighter limits on guarantees to state enterprises, and a defined-contribution pension system for new employees.

In 2005, the state enacted its FRBM law, putting deficit and debt reduction into statute. The first revenue surplus, ₹481 cr, followed in 2005-06 after 22 yrs of deficits. Administrative reform ran alongside fiscal repair.

A 2004 law gave the single window statutory backing. Large projects went to a clearance authority chaired by the CM. Industrial land was assembled and mapped online. Approvals and government services later moved onto a single portal. For 2026-27, Odisha budgets a revenue surplus of 3% of GSDP, liabilities of 14.1%, and interest payments of 3.3% of revenue receipts. Bengal budgets a revenue deficit of 1%, liabilities of 38%, and an interest bill of roughly 17% of revenue receipts.

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Odisha offers Bengal an important lesson, but not a template. The lesson is state and administrative capacity, not industrial composition. In 2022-23, manufacturing accounted for 18.8% of Bengal's employment. Its geography provides ports in the south and Siliguri in the north as a gateway to the northeast and neighbouring markets. It also favours logistics and distribution.

Chief minister Suvendu Adhikari is right to link incentives to employment, rather than investment alone. There is need for administrative discipline. A state must be able not only to grant support, but to monitor it, enforce its conditions and withdraw it when it fails. For Bengal, that comes down to 4 tests:

Land that is ready Publish how much industrial land is actually available, where it is, and when it will be serviced. Acreage is not enough. Investors need clear title, usable plots, road access, power and water.

Approvals that bind The new mechanism for projects above ₹100 cr must do more than route applications through same departments. Give it decisions that stick and deadlines with consequences. The 2025 revocation makes continuity a test in itself. Investors need certainty that benefits will survive a future change in policy.

Incentives that can be paid The new budget provides for 1 lakh posts and raises dearness allowance to 38%. Investors need to know what the incentives will cost, and where the money will come from. Publish the liabilities, budget for them and disclose when they fall due.

Results that can be counted Odisha tracks projects through approval, grounding and commissioning. Bengal should publish the same ledger every quarter.

Deliver the land, make approvals stick, and pay what is due. Then, count the factories, not the promises.