Manufacturing Sector of Bangladesh and West Bengal

Munim Kumar Barai (), Arindam Banik (), Sampada Kumar Dash and Helal Uddin
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Munim Kumar Barai: Ritsumeikan Asia Pacific University (APU)
Sampada Kumar Dash: International Management Institute
Helal Uddin: Ritsumeikan Asia Pacific University

Chapter Chapter 4 in Two Bengals, 2023, pp 83-107 from Springer

Abstract: Abstract The manufacturing sector is considered a growth engine in the two Bengals. When Bangladesh achieved independence, it was an agriculture-dependent country. It started transforming in the 1980s when the service sector’s Gross Domestic Product (GDP) contribution overtook the agriculture sector’s GDP. In the 2010s, the manufacturing sector surpassed the agricultural sector in terms of GDP contribution, thanks to the readymade garments (RMG) industry. This chapter finds that though the worker per capita value added is stagnating, Bangladesh has seen the emergence of other manufacturing areas like leather products, pharmaceuticals, shipbuilding, real estate construction, etc. As for West Bengal, studies show there has been a deceleration of the manufacturing sector. This has impacted employment and output. We find that capital productivity in the manufacturing sector has declined while labour productivity has increased. However, the latter has increased mainly due to a few industry groups, which are highly capital-intensive and have contributed around 85 per cent of the profit of the entire manufacturing sector. More interestingly, the total factor productivity (TFP) of the West Bengal manufacturing sector as a whole has been declining, while it has been increasing in the case of India.

Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:spr:sprchp:978-981-99-2185-0_4

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DOI: 10.1007/978-981-99-2185-0_4

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