The city's software needs to be upgraded and its human capital cluster rebuilt

At the beginning of the twentieth century, Calcutta (as it was known then) was the capital of the British Empire in India and its writ ran from the Khyber Pass to Burma. It was arguably the most advanced and cosmopolitan city in Asia. Its streets bustled with people from all over India and the world including Marwaris, Jews, Armenians, Europeans, and of course local Bengalis. It even had a vibrant Chinatown! It was home to Swami Vivekananda, Subhash Bose, Rabindranath Tagore to name a few of the Calcuttans who built modern India.

Even after the capital shifted to New Delhi and the shock of Partition, the city remained the cultural, intellectual and economic heart of India. In 1950, Calcutta’s metropolitan area had a population of 4.5 million compared to Bombay’s 2.9 million and Delhi’s 1.4 million. Many of the country’s top companies were headquartered in the city and its industrial cluster was the largest in Asia outside of Japan. Yet, today’s Kolkata rarely merits a mention for its economic or even cultural achievements. In the late sixties, it ceded its position as India’s commercial capital to Mumbai and has made no effort to gain it back. It remains the country’s third largest metropolitan region after Mumbai and Delhi, but in terms of economic importance it lags behind Bangalore, Hyderabad, Chennai and perhaps even Pune and Ahmedabad. What went wrong? Can Kolkata’s spirit be re-ignited?

Kolkata suffers from many of the same problems that plague other Indian cities ranging from traffic jams to slums. However, it would be difficult to argue that Kolkata’s physical infrastructure is especially bad. Water and power supply is far more erratic in Delhi, the traffic jams are far worse in Bangalore and the public transport system is far more crowded in Mumbai. Yet, Kolkata has lagged far behind all these cities. The reason is that Kolkata’s problems stem from its software rather than its hardware.

Urban software relates to social, economic, cultural and intellectual activities that animate a city and give it life. In particular, it relates to the clustering of human capital. Till the 1960s, Calcutta had the best clustering of human capital in India including industrial workers, corporate managers, artists and scholars. This human capital cluster unwound in the late sixties and seventies and completely disintegrated in the eighties.

This was the consequence of a cultural and political milieu that actively discouraged innovation and risk-taking of any kind. The impact of aggressive trade-unionism on Kolkata’s commercial sector is well known. Less well known is the impact of cultural close-mindedness on intellectual innovation. The teaching of English was stopped in government-run primary schools. Heterodox intellectuals like Nirad Chaudhury were actively persecuted. Institutions like Calcutta University were deemed elitist and either ignored or deliberately subverted. For half a century, there was a ban on any form of innovation in the way Tagore’s works were performed. His songs and plays had to be performed according to strict formulae. The result was that Kolkata went from being a cosmopolitan city to becoming a provincial town.

Not surprisingly, the city’s once proud middle-class (the “bhodrolok”) scattered all over India and the world. The city’s economic dynamism left with them. I know this from personal experience. Few of my childhood friends and classmates still live in the city. Kolkattans may be proud of Amartya Sen, Shashi Tharoor and Laxmi Mittal but these successful individuals left the city decades ago.

In recent years, the citizens and rulers of Kolkata have begun to recognise the need for change. As readers will know, the initial efforts at reviving the industrial sector have got tied down by disputes over land acquisition. However, the real issue is not the availability of industrial land or urban hardware. The real problem is that the city’s software needs to be upgraded and the human capital cluster needs to be rebuilt.

In my last Business Standard column (‘Reinventing Delhi: Cutting the Gordian Knot’, 2nd September 2009), I had argued that urban re-engineering should rely less on master-plans and more on strategic interventions. Usually, these strategic investments relate to hardware such as the Delhi Metro. However, in Kolkata’s case the required strategic interventions involve investing in “software”.

Kolkata is still home to a disproportionately large number of cultural and intellectual institutions, many of them built during British rule. These include academic institutions like Calcutta University (and famous colleges like Presidency and St. Xavier’s), the Indian Statistical Institute and the Indian Institute of Management at Joka. Not far away are IIT-Kharagpur and Viswa Bharati, Shantiniketan. Kolkata is also home to the National Library, the Asiatic Society and to the Indian Museum, Asia’s oldest museum. Kolkata still holds one of the world's largest book fairs and possibly the most spectacular religious carnival— the Durga Puja (sorry Rio). It even has the world’s most extra-ordinary collection of colonial-era buildings including architectural treasures like the Victoria Memorial and Writer’s Building.

All of these are assets of enormous economic value. The future of Kolkata lies in unlocking this value. Unfortunately, virtually all of these assets have been allowed to decay for decades. The city’s government, its citizens and its well-wishers need to re-invest in them and revive Kolkata as a hub of cultural/intellectual innovation. This is not an elitist vision about high-culture but one that goes to the heart of what gives a great city its “buzz”. Cities like New York, London and even Mumbai are not just great commercial hubs but also important cultural and intellectual hubs. Their secret of success is the bubbling cauldron of ideas and influences (Raj Thackarey should learn to appreciate this).

To conclude, Kolkata’s revival needs investment in its software rather than in its hardware. We need to re-ignite the spirit that animated the city in the nineteenth and early twentieth centuries. This needs investment of money and effort in bringing back its cultural and intellectual institutions (and building a few new ones as well). In turn, this will build back the cluster of human capital that once drove the economy. And best of all, this strategy does not require large-scale land acquisitions!