West Bengal FY27 Budget: SBI report hints shift to investment-led growth and economic transformation

A thematic analysis by State Bank of India (SBI) points to a decisive shift in the West Bengal FY27 Budget towards investment-led growth and economic transformation.

Themes relating to investment, governance, fiscal management, technology, entrepreneurship, tourism and climate resilience (that were hitherto absent in earlier budgets in terms of focus) assume greater prominence suggesting a strategic reorientation of the budget discourse towards industrialization, productive capacity creation, and long-term growth acceleration.

The SBI research report says that West Bengal’s fiscal position has not been healthy with higher debt accumulation, despite higher share of Central Government grants. In a persistent trend, grants from the Centre and tax devolution to West Bengal over the years has always been more than 50% 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 “middleman intermediation” siphoning of monetary resources.

West Bengal has significant potential of higher non tax revenue that has been languishing over the years…enhancing general administrative efficiency remains key to increasing non-tax revenues.. West Bengal is seventh largest in terms of coalbed methene. The state can become the hub of methanol production given the locational advantage in CBM and coal gasification.

The report adds West Bengal legally abandoned continuation of revenue deficit as a target in 2020 FRBM Act. Subsequently, West Bengal revenue deficit jumped further from FY20 onwards…West Bengal has never achieved its outstanding debt / GDP target as specified in FRBM. West Bengal also has unrealised revenue booked in budget but remain locked in legal disputes or are unrecoverable due to administrative hurdles, creating a massive fiscal drag.

Notably, WB had per capita income greater than all India in FY78, but the situation worsened over the years with per capita income in FY25 23% lower than the all-India PC income level.

As part of a future endeavour there is a need to operationalisation of an Eastern Multimodal Growth Corridor linking Bihar, Odisha, West Bengal and Assam, by integrating existing rail, road, port and inland-waterway asset, the SBI research report added.