Kolkata - Economy

Economy

Kolkata is the main commercial and financial hub of East and North-East India and home to the Calcutta Stock Exchange. It is a major commercial and military port, and is the only city in eastern India to have an international airport. Once India's leading city, Kolkata experienced a steady economic decline in the decades following India's independence due to steep population increases and a rise in militant trade-unionism, which included frequent strikes that were backed by left-wing parties. From the 1960s to the late 1990s, several factories were closed and businesses relocated. The lack of capital and resources added to the depressed state of the city's economy and gave rise to an unwelcome sobriquet: the "dying city". The city's fortunes improved after the Indian economy was liberalised in the 1990s and changes in economic policy were enacted by the West Bengal state government.

Flexible production has been the norm in Kolkata, which has an informal sector that employs more than 40% of the labour force. One unorganised group, roadside hawkers, generated business worth 8,772 crore (US$ 2 billion) in 2005. 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). 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. About 34% of the available labour force in Kolkata slums were unemployed. As in many other Indian cities, information technology became a high-growth sector in Kolkata starting in the late 1990s; the city's IT sector grew at 70% per annum—a rate that was twice the national average. The 2000s saw a surge of investments in the real estate, infrastructure, retail, and hospitality sectors; several large shopping malls and hotels were launched. 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.

Kolkata is home to many industrial units operated by large public- and private-sector corporations; major sectors include steel, heavy engineering, mining, minerals, cement, pharmaceuticals, food processing, agriculture, electronics, textiles, and jute. ITC Limited, Coal India Limited, and Britannia Industries rank among the companies headquartered in the city. Kolkata hosts the headquarters of three major public-sector banks: Allahabad Bank, UCO Bank, and the United Bank of India. Adoption of the "Look East" policy by the Indian government; opening of Sikkim's Nathu La mountain pass, which is located on the border between India and China, to bi-directional international trade; and the interest shown by South-East Asian countries in expanding into Indian markets are factors that could benefit Kolkata.