Economist Sanjeev Sanyal explains how Kolkata lost its technological edge and Bengaluru claimed India's IT crown

Bengaluru’s emergence as India’s tech capital may have had an unlikely connection with Kolkata, according to economist Sanjeev Sanyal. Looking back at the contrasting economic trajectories of the two cities, Sanyal argued that talent migration from Kolkata helped fuel the rise of Bengaluru’s tech ecosystem.

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

Sanyal recounts Calcutta’s earlier position in India’s technological landscape, recalling an incident involving IBM and its mainframe computers.

“I distinctly remember when IBM was bringing in the big mainframes, they actually went on strike against them in Calcutta,” Sanyal said. “You can say that the real founder of the Bengali IT hub is actually Jyoti Basu. Then all the talent left and went there.”

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How Kolkata’s loss became Bengaluru’s opportunity

Sanyal’s argument centers on the movement of skilled talent. He pointed to a period when Calcutta was still one of the most important economic centers of India, but in his opinion was becoming increasingly hostile to industry.

Jyoti Basu was the Chief Minister of West Bengal from 1977 to 2000 and led the Left Front government for more than two decades. His tenure saw land reforms, stronger panchayati raj institutions and a strong trade union movement.

Sanyal’s comments come amid criticism that the Left government’s policies and union influence have discouraged industrial investment in West Bengal.

The economist recalled that Kolkata was once at the center of several emerging economic activities, including technology.

“There’s a lot of activity that was centered outside of Calcutta. In fact, the information technology center of India… a lot of it was based out of Calcutta. It was all deliberately undermined.”

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

The rise of Bengaluru as the tech capital of India

Bengaluru established itself as the hub of India’s information technology industry, attracting companies, engineers, entrepreneurs and investment over the following decades.

Sanyal’s remarks offer a different perspective on this transformation: rather than seeing Bengaluru’s rise solely through the growth of its own tech ecosystem, he links it to Kolkata’s weakening position.

This 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 led to a loss of talent, which eventually benefited other urban centers.

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Kolkata and Bengaluru have taken different paths

“When I was born in 1970, Calcutta was still the biggest economic center of India,” the economist said of Calcutta. “Bombay emerged as a rival, but Calcutta was still the largest industrial centre.

He also recalled the importance of the Calcutta Stock Exchange and the concentration of several economic activities in the city.

However, over time, Bengaluru, Hyderabad and Chennai have emerged as major technology and business hubs in South India, with Bengaluru in particular becoming synonymous with the Indian IT industry.

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

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Why Bengaluru Matters East India Debate

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

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

“And East India, as I’ve said before, is clearly behind the rest of the country. If you look at a map and plot all the social, economic and other indicators, you’ll see one thing very clearly. India is not about a North-South divide – it’s very much an East-West divide. And one of the reasons is that East India doesn’t have any big urban centers that are growing very fast.”

He contrasted this with South India, where Bengaluru, Hyderabad and Chennai have emerged as major growth centres, and Western India, where Mumbai, Pune and Ahmedabad play a similar role.

“East India has neither one nor their network,” he said. “So this is a gap that needs to be filled.

Sanyal’s comparison of Bengaluru and Kolkata

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

His recipe for Bengal begins in Calcutta, 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 old institutions. It has sheer size. Despite 50 years of decline, there is still some industrial capacity. And some memory of when it was a major economic center,” Sanyal said.