Bengal Budget: State's grant-in-aid component projected to rise 31 per cent by March 2026

Kolkata(The Uttam Hindu): The West Bengal government's dependence on grants-in-aid from the Union government is all slated to continue during the financial year 2025-26, with the figure slated to rise by 30.69 per cent by March 31, 2026. As indicated in the documents of the state budget for the fiscal under review, the budget estimates for 2025-26 have projected the grant-in-aid figure at Rs 37,157.57 crore by March 31, 2026, as against the figure of Rs 28,431.23 crore by March 31, 2024, as mentioned in the revised estimates for 2024-25.

Incidentally, the dependence of the West Bengal government on Central grant-in-aid has been highlighted in a recent report by NITI Aayog titled “Fiscal Health Index: 2025”, where it has been pointed out that the state’s reliance on grants-in-aid as a proportion of revenue receipts has increased from 17.6 per cent in 2018-19 to 19.6 per cent in 2022-23, the fiscal till when the health of the finances of different state government has been reviewed.

Similarly, the share of the state in Union taxes and duties is slated to rise to Rs 1,06,998.64 crore (Budget estimates for 2025-26) by March 31, 2026, an 11.44 per cent rise from the figure of Rs 96,009.97 crore (revised estimates for 2024-25) by March 31, 2025. The positive picture of the state finances in the Budget documents is that the state's non-tax revenue, which witnessed a major decline as per the revised estimates for 2024-25 is projected to have a phenomenal jump by 184 per cent as per the budget estimates for 2025-26.

The state's non-tax revenue, which was just Rs 3,286.42 crore as per the revised estimates for 2024-25, is expected to increase to Rs 9,360.41 crore as per the budget estimates for 2025-26. In fact, NITI Aayog too in its report, has expressed concern over the decline in non-tax revenue of the West Bengal government.

As per the Budget document, the state's own tax review by March 31, 2026 is expected to rise to Rs 1,12,543.80 crore (Budget estimates for 2025-26), a 12.58 per cent increase over the figure of Rs 99,863.16 crore (revised estimates for 2024-25) as on March 31, 2025. Economists feel that the revenue receipt column for the West Bengal government for 2025-26 has both rosy and gloomy pictures.

While the phenomenal rise in the non-tax revenue and the more-or-less impressive rise in the state's own tax review are indications of good fiscal health, this positive factor is negated to an extent by the rising dependence on central grant-in-aid.