West Bengal Faces Fiscal Strain Amid Rising Expenditures

West Bengal's fiscal health in the first half of 2024-25 exhibits a disparity between revenue and capital expenditures. Revenue spending rose by 13.5%, while capital expenditure only increased by 7.7%, missing targets. The state's fiscal deficit of 3.7% GSDP surpasses the recommended ceiling.

West Bengal is grappling with growing fiscal challenges as the state's financial dynamics for the first half of the 2024-25 fiscal year reveal a widening chasm between revenue and capital expenditures. According to a CareEdge report, revenue expenditure soared by 13.5% year-on-year, while capital expenditure saw a meager rise of 7.7%.

The state's fiscal deficit has reached 3.7% of its Gross State Domestic Product, surpassing the 15th Finance Commission's advised ceiling of 3%. This positions West Bengal at a higher fiscal deficit threshold compared to the national average of 2.9% GSDP.

The report highlights that delayed capital spending could impede infrastructure advancements, pointing out the influence of election-linked initiatives and freebies as potential causes for fiscal slippage. The overall sluggish capital expenditure raises concerns about the state's long-term economic growth prospects.

(With inputs from agencies.)