Kolkata | SBI Research has said the West Bengal Budget for 2026-27 carries the most optimistic policy narrative in 17 years, marking a decisive shift from the redistributive framework that defined both the Left Front and Trinamool Congress rule.
The BJP government in West Bengal sought to blend welfare continuity with political and administrative reset in its maiden budget presented on Monday, as it pledged to fill one lakh government vacancies and increase dearness allowance by 20 percentage points, while stressing the need for fiscal discipline.
In a note released on Wednesday, the State Bank of India's economic research arm said an analysis of West Bengal budget speeches from 2010-11 to 2026-27 found that this budget exhibits an unprecedented degree of positive linguistic framing, with future commitment keywords scoring 150.5 mentions per 10,000 words, more than four times the 33 mentions in the TMC government's final budget.
The report said the state's economic challenges underscore the significance of the policy shift.
West Bengal, which had a higher per capita income than the national average and ranked fifth in the country in 1978, slipped to the 19th position by FY25 and is now about 23 per cent below the all-India per capita income level.
The thematic intensity of investment and governance also touched their highest levels in the entire series in FY27, the report said, while themes such as technology, entrepreneurship, tourism and climate resilience "largely absent from earlier budgets" assumed greater prominence.
The study said the budget narrative indicates a transition from a predominantly redistributive policy framework towards a capability-oriented strategy focused on investment, industrialisation and productive capacity creation.
The report compared fiscal and economic trends across the CPI(M) government from 1977-78 to 2010-11, the TMC era from 2011-12 to 2025-26 and the BJP government's first year.
During the Left Front's 34-year tenure, nominal GSDP rose from Rs 6,423 crore in 1977-78 to Rs 4.61 lakh crore in 2010-11. Revenue receipts increased from Rs 699 crore to Rs 47,264 crore, while revenue expenditure climbed from Rs 701 crore to Rs 64,538 crore.
Capital expenditure rose from Rs 78 crore to Rs 2,226 crore during the period, with SBI Research noting that revenue expenditure grew substantially faster than capital spending in real terms.
The TMC period saw nominal GSDP increase from Rs 5.20 lakh crore in 2011-12 to Rs 19.91 lakh crore in 2025-26, while capital expenditure rose from Rs 2,763 crore to Rs 26,438 crore.
However, revenue deficit widened from Rs 14,571 crore in 2011-12 to Rs 41,164 crore in the revised estimates for 2025-26, while the state continued to grapple with rising debt and fiscal pressures.
The BJP government's first full budget has targeted a sharp reduction in revenue deficit to Rs 21,984 crore, or 1.02 per cent of state GDP, approximately half of the preceding year's revised figure, while capital outlay is projected to rise 54.8 per cent to Rs 40,930 crore.
The fiscal deficit has been budgeted at 2.9 per cent of GSDP, down from 3.4 per cent in FY26.
The report highlighted plans for a semiconductor unit in Durgapur, a greenfield airport at Kalyani and a deep-sea port in Purba Medinipur, along with the reintroduction of industrial incentives, as part of a broader industrial revival strategy.
The report, however, flagged deep structural concerns inherited across all three regimes.
West Bengal has been a revenue-deficient state for all 21 years of the tracked period and has never achieved its outstanding debt-to-GSDP target under the FRBM framework. The state's outstanding liabilities stand at around 38 per cent of GSDP, well above the 34.3 per cent target.
More worryingly, the report noted that over 50 per cent of the state's revenue receipts continue to come from central transfers and tax devolution, with its own non-tax revenue stuck at around 3 per cent of total receipts.
As of 2025-26, revenues worth Rs 7,844 crore assessed and raised by the state remain unrealised, locked in legal disputes or administrative hurdles, the report said.
SBI Research suggested that to break this fiscal pattern, West Bengal should focus on augmenting non-tax revenues through administrative reforms, asset monetisation, property tax collection improvements and value addition in its mineral endowments, including methanol production using coal-bed methane reserves.
The report said the success of the new approach would ultimately depend on improving fiscal discipline, attracting private investment and reversing the state's long-term decline in relative income levels.
