Economy of Kolkata

As the capital of British India and home to the fertile agricultural and mineral-rich land of eastern India, Kolkata was one of the first areas of India to develop industrially.

The first jute and paper mills of India were started in the Kolkata area in the 1800s.

By 1921 nearly 35 percent of India’s industrial workers were located in Kolkata.

However, Kolkata began to lose its industrial leadership after India gained its independence in 1947.
One cause was the loss of Kolkata’s raw jute supply when Bengal was divided into West Bengal and East Bengal, with East Bengal becoming part of Pakistan. Competition in jute manufacturing from East Bengal (later East Pakistan, now Bangladesh) further hurt Kolkata’s jute industry.

Competition and slow growth also hit other traditional manufacturing areas, such as heavy engineering, rubber, and paper.

Other factors that have hurt metropolitan Kolkata’s industrialization include a 1977 ban imposed by the Indian government on new licenses of large-scale industrial units in the large metropolises; labor troubles since the end of 1960s; pro-union attitude of the state government; severe power shortages; limitations on raw materials; and shortage of capital.

Moreover, a slow depletion of water volume in the Hugli River limited the size of ships at Kolkata’s docks, causing Kolkata to lose its status as the premier port city of India.

The water supply problem has been resolved to some extent by diverting water from the Ganges River to the Hugli, and by constructing a diversion canal and the Farakka barrage, which increased the depth of the channel, in 1976.

A deep port at Haldia, about 65 km (about 40 mi) south of the Kolkata, has also been established.

Ships arriving at Kolkata from the Bay of Bengal travel only when the river is in high tide, escorted by specially trained Hugli pilots; additionally, the river channel is constantly dredged.

Few new major industries came into the KMD in the 1970s and 1980s, but in the mid-1990s the state attracted some large-scale capital investments both from native and foreign sources because it relaxed its anti-capitalist stance.

Although Kolkata’s poor economic factors have caused it to lose its designation as India’s largest commercial and banking center, it is the headquarters of many native business firms, banks, and international corporations.

One of India’s largest companies, Birlas, is headquartered in Kolkata.

As the remaining agricultural land has been lost to urban development, the percentage of Kolkata’s workers employed in various fields has changed.

About 60 percent of workers are employed in services and about 40 percent in industry. The agricultural and industrial sectors experienced the greatest declines.

The majority of people employed in the service sector are involved in trade and commerce, in jobs that generally offer little pay or security. Most of this group works in retail or small-scale trading establishments, often without a roof, either in a family business or employed by a small investor.

Kolkata still continues to attract surplus labor from surrounding areas, increasing the population over and above the city’s natural birthrate increase.

Public transportation, such as buses, trams, trains, and subways, are the principal means of transport in the Kolkata metropolitan area.

Buses operate throughout the area, and trains have north-south lines with a few east-west connections.

There are two major train terminals: Sealdah in the east central part of Kolkata and Hāora across the river from the Central Business District. Electric trams operate in Kolkata proper.

The aging buses, trains, and tram cars suffer from overloading, creating uncomfortable rides.

Subway construction started in 1972 and became operational with 7 km (4.3 mi) of line in 1984.

By 1995 all of the subway’s 16.4-km (10.2-mi) route from Dum Dum to Tolluguye was completed. The subway carries an estimated 25 percent of Kolkata’s 7 million commuters.

Cycle rickshaws are not allowed in the city of Kolkata, but they are common in the metropolitan area.

Hand-pulled carts are used for short-distance cargo hauling. Private automobiles, extensively used in Kolkata and Hāora, are increasing in numbers and are owned by the wealthy.

The streets of Kolkata remain congested with taxis, private automobiles, buses, slow-moving trams, and hand-pulled carts.

Air pollution caused by automobiles, buses, and industrial emissions is severe.

Kolkata’s international airport at Dum Dum provides service for both national and international airlines.