West Bengal Budget: Anticipated 31% Increase in State's Grant-in-Aid by March 2026
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Synopsis
The West Bengal government’s reliance on grants-in-aid from the Union government is projected to persist, with an anticipated increase of 30.69% by March 31, 2026. The state’s financial documents reveal significant changes in tax revenues and concerns over declining non-tax revenue.
Key Takeaways
- Projected grant-in-aid increase of 30.69% by March 2026.
- State's non-tax revenue expected to rise by 184%.
- Union tax share projected to reach Rs 1,06,998.64 crore.
- Concerns raised over declining non-tax revenue.
- Own tax revenue anticipated to increase by 12.58%.
Kolkata, Feb 12 (NationPress) The West Bengal government's reliance on grants-in-aid from the Union government is expected to persist throughout the financial year 2025-26, with projections indicating an increase of 30.69 percent by March 31, 2026.
According to the state budget documents for the fiscal year under review, the estimated grant-in-aid figure for 2025-26 is projected to reach Rs 37,157.57 crore by March 31, 2026, compared to Rs 28,431.23 crore by March 31, 2024, as outlined in the revised estimates for 2024-25.
A recent report by NITI Aayog, titled “Fiscal Health Index: 2025”, has underscored the West Bengal government’s reliance on central grant-in-aid, noting that the state’s dependence as a proportion of revenue receipts rose from 17.6 percent in 2018-19 to 19.6 percent in 2022-23—the period during which the financial health of various state governments was assessed.
Meanwhile, the state's share in Union taxes and duties is projected to increase to Rs 1,06,998.64 crore (Budget estimates for 2025-26) by March 31, 2026, marking an 11.44 percent rise from Rs 96,009.97 crore (revised estimates for 2024-25) by March 31, 2025.
A positive aspect of the state's finances highlighted in the budget documentation is the anticipated surge in the state’s non-tax revenue, which, after a significant decline in the revised estimates for 2024-25, is projected to experience a remarkable jump of 184 percent in the budget estimates for 2025-26.
The non-tax revenue, which was recorded at just Rs 3,286.42 crore per the revised estimates for 2024-25, is expected to rise to Rs 9,360.41 crore according to the budget estimates for 2025-26.
NITI Aayog's report has also voiced concerns regarding the dip in the West Bengal government's non-tax revenue.
The budget document indicates that the state's own tax revenue by March 31, 2026, is projected to reach Rs 1,12,543.80 crore (Budget estimates for 2025-26), representing a 12.58 percent increase over the Rs 99,863.16 crore (revised estimates for 2024-25) by March 31, 2025.
Economists suggest that the revenue receipt outlook for the West Bengal government for 2025-26 presents both optimistic and pessimistic elements.
While the substantial growth in non-tax revenue and a relatively encouraging rise in the state’s own tax revenue indicate positive fiscal health, this is somewhat undermined by the increasing dependence on central grant-in-aid.
