West Bengal budget 2026: The BJP charts a new course
West Bengal’s newly formed BJP government will presented its first full-year budget on June 22, 2026, against the backdrop of a long economic decline that the state has experienced over several decades. Once a major contributor to India’s GDP-accounting for 10.5 percent in 1960-West Bengal’s share had fallen to just 5.6 percent by 2024-25. Per capita income tells a similar story: from 127.5 percent of the national average in 1960 to only 79.5 percent today. Much of this slide is attributed to weak industrial policy. Older industries faded away, new investment never arrived in sufficient scale, and recurring labor unrest pushed both factories and corporate headquarters out of Kolkata toward other states.
Critics argue that years of populist spending and appeasement-driven politics turned the state budget away from development and toward consumption. As growth lagged, so did revenue, and the gap was increasingly filled by borrowing. Public debt, which was about 22 percent of state GDP in 1990, has since climbed to around 38 percent, placing West Bengal among India’s most indebted states. The outgoing Mamata Banerjee government’s interim budget for 2026-27 had projected a fiscal deficit of 3.5 percent, a figure the BJP repeatedly attacked during its campaign. That criticism now puts pressure on the new administration to rein in spending and stabilise the debt trajectory.
At the same time, the new finance minister can’t simply cut welfare spending outright. Direct Benefit Transfer programs are expected to continue and even expand, though with tighter targeting to curb leakages and waste.
Mirroring the approach taken by the central government and other BJP-led states, West Bengal increased outlays on roads, industrial parks, logistics hubs, ports, waterways, and urban development.
One striking figure from the outgoing government’s interim budget has drawn particular attention: Rs 5,713.61 crore allocated to the Department of Minority Affairs and Madrasah Education.
Among Indian states, only Telangana comes close to matching this in absolute terms, though its per-capita spending on minority residents is actually higher despite a smaller total figure-and Telangana, too, is governed by a non-BJP party. More notably, this single state department’s allocation dwarfs the spending earmarked for MSMEs (roughly Rs 1,250 crore) and for industry and commerce combined (around Rs 1,484 crore). It also exceeds the entire Union Ministry of Minority Affairs budget for 2026-27, which stood at just Rs 3,400 crore nationally. For critics, this disparity raises pointed questions about whether the previous government’s spending priorities favored political constituencies over productive, job-creating sectors of the economy.
Industrial revival is to be a centerpiece of the new budget. After decades of deindustrialisation, the BJP leadership has signaled intent to build a more business-friendly climate-freeing up land for industry, reviving dormant manufacturing clusters, and courting investment in steel, chemicals, engineering, electronics, and food processing.
There’s also talk of actively wooing back investors who left the state in earlier years. Beyond attracting capital, the government is expected to prioritise job creation through large-scale recruitment drives, skilling programs, and apprenticeships, while also extending support to small and cottage industries and new startups.
Agriculture and rural development remain central to the state’s economy and have receive renewed focus-expanded irrigation, stronger food processing capacity, better agricultural value chains, improved cold storage and logistics, and easier market access for farmers. Given that agriculture will continue to employ a large share of the population for years to come, this sector isn’t likely to be sidelined even as industrial policy takes center stage.
On the welfare front, the new government appears set to honor a campaign promise to double the monthly cash transfer to women from Rs 1,500 to Rs 3,000. However, there are widespread perceptions that the existing scheme suffers from significant leakage and fraudulent enrollment under the previous administration.
A re-verification of beneficiaries is expected, which would likely shrink the total number of recipients-but with the same budget pool stretched across fewer, genuine beneficiaries, the actual payout per person could rise meaningfully. Healthcare policy is also poised for a major shift with the planned rollout of the central government’s Ayushman Bharat scheme in the state. Ayushman Bharat, now in its eighth year nationally, offers free treatment up to Rs 5 lakh per family, with the central government covering 60 percent of costs and the state covering the rest. Until now, West Bengal had run its own parallel scheme, Swasthya Sathi, covering all 2.45 crore families in the state entirely from the state budget. Under the new arrangement, roughly 1.43 crore poor families would shift to Ayushman Bharat, with the center picking up most of the bill, while the remaining roughly one crore families continue to be covered through state funds. Between December 2016 and October 2025, the state had spent about Rs 13,156 crore extending hospitalisation benefits to a crore beneficiaries. With central funding now offsetting much of this cost, the state stands to free up resources for other priorities.
Taken together, the budget balances fiscal discipline with continued welfare commitments: trimming wasteful spending, pushing harder on infrastructure and industry, doubling direct cash support to women, and shifting healthcare costs partly onto the central government-all while trying to chart a more sustainable fiscal path than the one the state has followed for decades.
The writer is National Co-convenor, Swadeshi Jagaran Manch and Former Professor, PGDAV College, University of Delhi; Views presented are personal.
