Economy of Kolkata

JL Nehru Road, one of the CBD in Kolkata

Kolkata South Central CBD

Kolkata is the main business, commercial and financial hub of eastern India and the main port of communication for the North-East Indian states. Kolkata is home to India's oldest, and also India's second-largest stock exchange company (bourse)^[1] – 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.^[2] Kolkata is also home to India's and South Asia's first metro railway service – Kolkata Metro.^[3]

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.^[4]

Economic history and recent developments

Tata Centre, JL Nehru Road

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^[5] with the liberalization of the Indian economy. Several industrial estates like Bantala Taratolla, Rajarhat, Durgapur, Kalyani, Uluberia, Dankuni, Burnpur, Kasba, Howrah, specialized setups like the country's first Toy Park, and a Gem and Jewellery Park are spread throughout the urban agglomeration. The establishment of a new harbour at Haldia and industries like Haldia petrochemicals was one of the major comebacks of the state of West Bengal, which in turn improved business and industry in the state capital. In 2009, Kolkata was ranked the hardest Indian city in which to do business by the World Bank.^[6]

A plethora of IT-SEZ and IT parks have come up in the city, attracting software corporations and Foreign Direct investment in Kolkata. More recent development like a huge leather complex that has come up at Bantala an export processing zone that has been set up in Falta has set the city's reputation as an industrial hub in right path once again, paving its way for the new beginning in the 1990s.

A satellite township development named Kolkata West International City across 400 acres (1.6 km²) is under construction, comprising several IT-parks, Malls, residential Complexes, hospitals, entertainment zones. This project is a joint venture between Indonesian-based Salim Group and Universal Success Group in collaboration with Kolkata Metropolitan Development Authority. The project is considered to be one of the largest foreign direct investments in township projects in India.^[7] Another such large-scale satellite township is being developed, known as Calcutta Riverside, which is a joint venture between Riverbank Holdings Private Ltd. and Bata India Ltd. and CMDA spreading across 270 acres (1.1 km²).

Economic sectors

Hawkers in Chandni Chawk

As of 2001, around 0.81% of the city's workforce was employed in the primary sector (agriculture, forestry, mining, etc.); 15.49% worked in the secondary sector (industrial and manufacturing); and 83.69% worked in the tertiary sector (service industries).^[8]:19 As of 2003, the majority of households in slums were engaged in occupations belonging to the informal sector; 36.5% were involved in servicing the urban middle class (as maids, drivers, etc.), and 22.2% were casual labourers.^[9]:11 About 34% of the available labour force in Kolkata slums were unemployed.^[9]:11

Most of the slum dwellers and lower economic class mass participate in the informal economy^[10] and work in laundering, housecleaning, sweeping, plumbing, furniture making, electrical wiring, electronics repairing, masonry, hair cut and beauty saloning,autocab driving, tailoring, leather work, daily wage labouring, shoe making, food selling, push cart selling, manual and cycled rickshaw pulling and as workers at local grocery stores. Until recently, flexible production had always been the norm in Kolkata, and the informal sector has comprised more than forty percent of the labor force.^[11] For example, hawkers in Kolkata, numbering 275,000 working from temporary or semipermanent arrangements along Kolkata's streets generated business worth Rs. 87.72 billion (around 2 billion U.S. dollars) in 2005.^[12] 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.

Cultural Economy Of Kolkata

Kolkata is also home to some niche businesses and occupations run by individuals and families that hold on to the old world charm interspersed with strong essence of quintessential Bengali culture Kolkata is globally recognised in the region for,while generating fairly good business. For example, Bengali sweetshops offering delectable sweets dot the streets of the city. Some of the renowned sweetshops in kolkata are Dwarik's, K. C. Das, Mouchak, Balaram Mullick and Radharaman Mullick, Girish Chandra Dey and Nakur Chandra Nandy, Hindustan Sweets, Mithai, Nalin Chandra Das&sons, Bhim Chandra Nag, Sen Mahasay, Ganguram's. Bengali dramas,while garnering critical acclaims,manage to intrigue its traditional urbane audiences. Kolkata has some thriving publishing houses that publish quality Bengali literature. Some fine dine Bengali restaurants along with others offering multi cuisine have its appeal among Kolkata's residents and frequent travellers to the region. Boutiques run mostly by women that specialise in Bengali handloom and cottage industries and fusion-fashion have managed to gain foothold in the clothing market while the traditional family run saree stores that offer innumerable variety of art and fashion still dominate the sector. Bengali cinema industry based out of Kolkata's Tollygunge churn out several commercially successful movies of thoughtful and unique urban genre each year. Jewellery shops offering traditional Bengali designs as well as contemporary ornaments have made an impression in Kolkata's socioeconomic culture.

GDP of Kolkata

SBI Regional HQ, Strand Rd

According to a Pricewaterhouse Cooper's report, as of 2009, Kolkata's economic output as measured by gross domestic product as 104 billion US dollars, and ranks third among South Asian cities, behind Mumbai and Delhi.^[13] However, As of 2010, 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.^[14] Kolkata's nominal GDP is expected to reach US$169 billion in 2030, with a per capita nominal GDP of US$7,400.^[15] 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.^[16][17]

Major companies based in Kolkata

With its huge economy and cheap living expenses, it is one of the World's major centers of business in GDP PPP terms. Many industrial units, of large Indian corporations, whose product range is varied and includes – engineering products, electronics, electrical equipment, cables, steel, leather, textiles, jewellery, frigates, automobiles, railway coaches, wagons, tea, paper, pharmaceuticals, chemicals, tobacco, food products, jute products – are headquartered in Kolkata. Recently the city has been transformed to a major information technology hub in India.

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, Jai Balaji group, Orient Airways, KKN Group, Chirag Computers, Bengal Ambuja, Berger Paints India Ltd, SIMOCO (First Wireless Equipment and Mobile phone manufacturers from East India), Emami Ltd., Eveready Industries India Ltd., Stewarts & Lloyds of India, Ltd., 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.^[18] 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.

Banking and finance

HSBC in Kolkata

Kolkata is an important centre for banking and finance. 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. 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 have its Head Office in Kolkata, which is the only bank after independence to be established in the city.

India's second financial hub after the Bandra-Kurla Complex in Mumbai, is under construction at New Town in the northeastern fringes of the city. Spread over 300 acres, the financial hub will house several banking and financial institutions, insurance companies and stock exchanges apart from hospitality and educational institutions.^[19] Within three months of laying the foundation stone of the project, the Housing Infrastructure Development Corporation (HIDCO) has handed over plots to five nationalized banking and financial institutions; State Bank of India,UCO Bank, United Bank, UTI Mutual Fund and Industrial Financial Corporation of India (IFCI).^[20]

Information technology (IT) industry boom

Millenium towers has many IT companies.

DLF IT Park, New Town

The state of West Bengal has promoted foreign direct investment, which has mostly come in the software and electronics field.^[2] Kolkata is a major hub for the information technology (IT) industry in India. With construction underway of New Town at Rajarhat and extension of Salt Lake's Sector-V, Kolkata is rapidly turning into a preferred IT/BPO destination. More and more businesses are coming to Kolkata to set up their offices, including International Giants such as IBM, Ericsson, Accenture, Cognizant, Texas Instruments, Cisco Systems, Intel Asia Electronics Inc, Deloitte, Sun Microsystems, Honeywell, PwC, HSBC Global Resourcing, Capgemini, Atos Origin, Foster Wheeler, Siemens, Novell. Leading the way in growth have been the Kolkata-based startup companies such ITC Infotech. The government has provided 17 acre to ITC Infotech for its software development centre near the city. The state IT department would shortly sign an MoU with IT giant Microsoft for setting up a research and training centre in the state. British Telecom (BT) has also taken 100,000 square feet of space for locating a high-end back office work at the DLF building.

Kolkata, being the only metropolitan city from East India, has attracted major software and telecom firms across India and abroad to set up their development centre there. The Eastern Region Council of NASSCOM, the premier trade body and the chamber of commerce of the IT-BPO industries in India, is situated in Kolkata.

This apart, other big Indian software firms have already made Kolkata their hub of operations for Eastern region of India. Of these Wipro, Infosys,^[21] TCS, Tech Mahindra, ITC Infotech, HCL Technologies, MphasiS, Genpact, Tata Interactive Systems, Ramco Systems, Firstsource, CMC Limited, NIIT Technologies, Moser Baer Ltd., Aptech IT, Aegis, Aditya Birla Minacs, Rolta India Ltd are leading the way. Owing to the recent boom in the economy of Kolkata and also the state as a whole, West Bengal is now the third fastest growing economy in the country^[22] and the city's IT sector is growing at a rate of 70% per year – twice the national average.^[23] With the proposed cable landing station in the coastal West Bengal in the offing, the city is going to offer even better infrastructure for I.T. Check.^[24]

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.^[25] It is to be noted that Kolkata has a process to obtaining trade license in the city which is unique in India.^[26] Kolkata Municipal Corporation (KMC) is the central authority which deals with the processing of new trade licenses and the renewal^[27] of the same as well.

Gallery

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  Unitech InfoSpace Hi-Tech Park (New Town) Kolkata

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  Unitech InfoSpace

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  HIDCO Bhawan (Narkel Bagan) New Town Kolkata

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  DLF (IBM Pvt. Ltd.) IT Tech Park, New Town, Kolkata

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  Inside Wipro Technologies Saltlake City, Sector V, Kolkata

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  Wipro Technologies, Saltlake City, Sector V, Kolkata

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  College More, Saltlake City, Sector V, Kolkata

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  Technopolis, Saltlake City, Kolkata

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  Saltlake City, Major Economy Towers

See also

• Kolkata Municipal Corporation
• HIDCO
• Bengal Renaissance
• Kolkata Metro
• Calcutta Stock Exchange Association Limited

References