Whalesbook
Economic Growth Divergence
Odisha has shown strong economic growth over the past two decades, with its Gross State Domestic Product (GSDP) expanding at an average annual rate of 7.0 percent from 2011-12 to 2023-24. This performance outpaced West Bengal's 4.7 percent and the national average of 6.0 percent. As a result, Odisha's share of India's GDP has increased, while West Bengal's has decreased.
Per Capita Income Overtake
A key sign of this difference is per capita income. In 2000-01, Odisha's per capita income was less than 56 percent of the national average. By 2024-25, it has risen to ₹1,68,966, slightly surpassing West Bengal's ₹1,63,467 and reaching 82 percent of the national benchmark. West Bengal has fallen to 80 percent.
Fiscal Strength Gap
NITI Aayog's Fiscal Health Index reveals a clear contrast. Odisha ranked first among 18 major states with a score of 73.1, due to its stronger revenue base. The state's own tax revenue is 7 percent of GSDP, significantly higher than West Bengal's 5.4 percent. Odisha's non-tax revenue, boosted by mining, is an impressive 6.8 percent of GSDP, far above West Bengal's 0.2 percent. This fiscal advantage gives Odisha more flexibility for investments.
Human Development Indicators
While economic metrics favor Odisha, West Bengal still leads in some human development areas. Monthly Per Capita Consumption Expenditure (MPCE) is higher in rural West Bengal, though Odisha's urban consumption is slightly greater. West Bengal's poverty rate is 11.89 percent, lower than Odisha's 15.68 percent. Life expectancy, Infant Mortality Rate (IMR), and Maternal Mortality Ratio (MMR) also show better results in West Bengal. However, both states struggle with high rates of anemia in women and children.
Reasons for the Shift
Odisha's growth is largely credited to its natural resources, especially minerals, combined with effective governance, fiscal discipline, and disaster preparedness. West Bengal faces structural challenges in boosting industry and revenue, despite its strong human capital. Moving forward, Odisha needs to turn economic gains into better health outcomes, while West Bengal must revitalize industry and infrastructure to drive recovery.