In a recent report titled Fiscal Health Index, the NITI Aayog has ranked 18 major states of the country in terms of their budgetary strengths measured in reference to fiscal and revenue deficits as well as the burden of debt that the states carry. This is based on data pertaining to 2022-23. The states have been divided into four clusters. West Bengal is clubbed in the fourth or the worst cluster along with Andhra Pradesh, Punjab and Kerala. The index is a composite measure of the quality of expenditure and revenue mobilisation along with the burden of debt and its sustainability. A poor index implies the presence of fiscal stress. Hence, to correct itself, the state has to improve its revenue mobilisation and spend more on capital expenditures to build infrastructure, which, in turn, will promote business investments and efficiency. West Bengal has a rank of 16 out of the 18 major states analysed, with only Andhra Pradesh and Punjab coming below it. Out of the different components measured, none of which is good for West Bengal when comparing its numbers with those obtained by the top two or three states, the score obtained for revenue mobilisation is really alarming. While fiscal prudence is left wanting, the score for revenue mobilisation indicates that West Bengal’s resource mobilisation in terms of taxes leaves much to be desired. The state’s spending on physical infrastructure, social services and capital expenditure have all decreased as a proportion of total expenditure from 2018-19 to 2022-23. The quantum of spending is also less than the national average.

The state government of West Bengal often projects an image that it funds numerous social projects and awards for the deprived sections of the population. This may be true but it is certainly not the best when compared to what the other states are doing. The core problem of Bengal’s economy remains one of low productive investments that are capable of creating more jobs and outputs. There is another warning signal that comes from across the border. Trade (both legal and illegal) with Bangladesh has been a major source of income for the state. But with the new political developments, this source of income has become much more uncertain. Despite the chief minister’s campaigns to attract investment for the state, the results have not been as expected. West Bengal does not seem to have a clearly outlined vision for development. Without that, new investments will be slow to arrive and the fiscal stress might keep deteriorating in the long haul.