Economist Sanjeev Sanyal Explains How Kolkata Lost Its Tech Edge And Bengaluru Won India's IT Crown

(MENAFN- Live Mint) Bengaluru's emergence as India's technology capital may have had an unlikely connection with Kolkata, according to economist Sanjeev Sanyal. Looking back at the two cities' contrasting economic trajectories, Sanyal argued that the migration of talent away from Kolkata helped fuel the rise of Bengaluru's technology ecosystem.

Sanyal, a member of the Economic Advisory Council to the Prime Minister, made the remarks during a podcast conversation with Abhijit Majumder, co-founder of The Bengal Inc.

Recounting Kolkata's earlier position in India's technology landscape, Sanyal recalled an incident involving IBM and its mainframe computers.

"I remember distinctly that when IBM was bringing in big mainframe computers, there was actually a strike in Kolkata against them," Sanyal said.“One can say that the true founder of Bengaluru's IT hub is actually Jyoti Basu. All the talent then left and went off there.”

Also Read | Bengaluru CEO won $500 hackathon prize at 15, now runs $50 million startup How Kolkata's loss became Bengaluru's opportunity

Sanyal's argument centres on the movement of skilled talent. He pointed to a period when Kolkata was still one of India's most important economic centres but was, in his view, becoming increasingly hostile to industry.

Jyoti Basu was West Bengal's chief minister from 1977 to 2000, leading the Left Front government for more than two decades. His tenure saw land reforms, stronger panchayati raj institutions and a powerful trade-union movement.

Sanyal's comments come against the backdrop of criticism that the Left government's policies and the influence of trade unions discouraged industrial investment in West Bengal.

The economist recalled that Kolkata had once been at the centre of several emerging economic activities, including technology.

"There are many activities that were hubbed out of Kolkata. In fact, India's information technology hub...a lot of it was based out of Kolkata. It was all deliberately undermined."

His contention is that as opportunities and talent moved away from Kolkata, Bengaluru was among the cities that benefited.

Bengaluru's rise as India's technology capital

Bengaluru would go on to establish itself as the centre of India's information technology industry, attracting companies, engineers, entrepreneurs and investment over subsequent decades.

Sanyal's remarks offer a different way of looking at that transformation: rather than Bengaluru's rise being viewed only through the growth of its own technology ecosystem, he connects it to the weakening of Kolkata's position.

The claim is particularly striking because Kolkata had an established economic base and an early presence in India's technology sector. Sanyal argues that the city's subsequent decline resulted in a loss of talent that ultimately benefited other urban centres.

Also Read | Subhash Chandra insolvency: NCLAT to hear appeal against 6.5 crore payout plan Kolkata and Bengaluru took different paths

"When I was born in 1970, Kolkata was still the single biggest economic hub of India," the economist said of Kolkata. "Bombay was coming up as a rival, but Kolkata was still the biggest industrial hub."

He also recalled the significance of the Kolkata Stock Exchange and the concentration of several economic activities in the city.

Over time, however, Bengaluru, Hyderabad and Chennai emerged as major technology and business centres in southern India, with Bengaluru becoming particularly synonymous with India's IT industry.

Sanyal believes the contrast illustrates the importance of creating an environment capable of retaining talent and attracting investment.

Also Read | Nepal floods: Bus carrying flood survivors crashes, 32 injured Why Bengaluru matters to the eastern India debate

Sanyal's Bengaluru-Kolkata comparison forms part of a broader argument about India's regional economic geography.

He said eastern India has lagged behind other parts of the country partly because it lacks a large urban hub experiencing rapid growth.

"And Eastern India, I've said this before, is distinctly behind the rest of the country. If you look at a map and plot all the social, economic, and other indicators, you will see one thing very distinctly. India is not about a north-south gap - it is very much an east-west gap. And one of the reasons for this is that eastern India does not have any big urban hub, which grows very fast."

He contrasted this with southern India, where Bengaluru, Hyderabad and Chennai have emerged as major growth centres, and western India, where Mumbai, Pune and Ahmedabad play similar roles.

"Eastern India doesn't have either one or even a network of them," he said. "So this is a lacuna that has to be filled."

Sanyal's Bengaluru-Kolkata comparison

For Sanyal, Bengaluru's success and Kolkata's decline are therefore closely linked in the story of India's changing economic landscape.

His prescription for Bengal begins with Kolkata, which he believes still has the infrastructure, institutions and scale needed to become an economic catalyst for eastern India.

"It has the infrastructure of a metropolis. It has legacy institutions. It has the sheer bulk. Despite 50 years of decline, there are still some industrial capabilities. And some memory of a time of having been a major economic hub," Sanyal said.

MENAFN31082026007365015876ID1111599306