Industry, labour and the state: emerging relations in the Indian state of West Bengal

Despite the pursuit of similar industrial policies during the post-1990s, Indian states have revealed divergent outcomes in industrial growth. Such divergence suggests different levels of policy implementation which itself is a result of the interplay of formal and informal institutions, historically shaped. We try to ex-plain this divergence in the context of the evolution of state-business relations in West Bengal, a coastal state in Eastern India, and unique among Indian states not only by virtue of being ruled by a Leftist regime for an uninterrupted 34 years (1977-May, 2011), but also by having witnessed a turnaround of sorts in the outlook of the former government towards private capital within this period. Our findings suggest that it is the peculiarity of institutional behaviour that determines the policy outcomes in the state. The rigidities in political as well as economic institutions in the state are prompting us to look at West Bengal as a classic case of 'institutional stickiness' leading to 'path dependency'.