The recently presented West Bengal Budget for FY27 under the BJP-led government has taken an investment-led growth approach, with themes relating to investment, governance, fiscal management, technology, entrepreneurship, tourism and climate resilience assuming greater prominence, according to a thematic analysis by SBI.
The focus on these sectors was missing in the earlier budgets of the state, said the report, thus creating a shaky fiscal position with higher debt accumulation over the years.
The current government faces an uphill task in terms of economic growth and raising the living standard of the people as its per capita income is 23 per cent lower than the all-India PC income level of ₹2.35 lakh. To be sure, the state’s per capita income was greater than all-India level in FY78.
State Finance Minister Swapan Dasgupta presented the government’s first full budget for 2026-27 on June 22, outlining a net budget allocation of ₹4.38 lakh crore. This is the first BJP-led government formed ever in the history of the state. The Trinamool Congress (TMC) ruled the state for 15 years, from 2011 to 2026.
Reducing dependence on grants
The report also highlighted the state’s excessive dependence on Centre’s grants.
“In a persistent trend, grants from the Centre and tax devolution to West Bengal over the years has always been more than 50 per cent of overall tax revenue of the state. This has happened owing to rising unconditional cash transfers, higher off-balance sheet borrowings and higher committed expenditure and higher leakages in terms of ‘middleman intermediation’ siphoning of monetary resources,” the report noted.
The state also legally abandoned continuation of revenue deficit as a target in the 2020 FRBM Act, which resulted in its revenue deficit rising further from FY20 onwards.
The report also pointed towards the state’s potential of raising non-tax revenue. “West Bengal is seventh largest in terms of coalbed methane. The state can become the hub of methanol production given the locational advantage in CBM and coal gasification,” the report added.
Going forward, the report suggested that the government should operationalise an Eastern Multimodal Growth Corridor linking Bihar, Odisha, West Bengal and Assam, by integrating existing rail, road, port and inland-waterway assets.
