The government debt of West Bengal is expected to outgrow 8 lakh crore by the financial year 2025-26, and it is a considerable increase in the fiscal burden of the state that has already raised eyebrows among economic analysts and political critics.
The state finance department reportedly affirmed that it was intending to borrow more market in the third quarter to make the overall borrowing in the year almost 1 lakh crore by March 2026. Under these new loans, the amount of the outstanding debt in West Bengal is likely to increase by 2024-25 to more than 7 lakh crore up to 2025-26. This is a significant rise against the debt of about 1.9 lakh crore by the end of the last Left Front government in 2010-11.
Authorities put the rapid growth in borrowing to a number of reasons, one being the deficit in central government funds, particularly on major initiatives like the Pradhan Mantri Awas Yojana-Grameen (PMAY-G). The state has replied with its own programs like the Banglar Bari that has added additional strains on the finances. The debt-to-GSDP ratio of the state is currently approximately 33.7 which is one of the largest in the country. The borrowed funds are also being employed on daily expenses like salaries, subsidies and administration instead of capital investments.
The fiscal deficit of the state is expected to be 73,178 crore, and the shortfall of the revenues will be 35,315 crore by March 2026, according to the 2025-26 budget documents. Economists caution that continued heavy borrowing accompanied by dearth of avenues of augmenting the own sources of taxation by the state is a threat to the financial health of West Bengal.
Although the finance minister has justified the states borrowing as a necessary evil to the lack of central funds and the increase in welfare demands, the opposition chiefs have condemned the accruing debt, which they argue, would have long term effects of poor financial conditions in the state.
The accumulated debt Is estimated to be lakh crore as of the 2025-26 fiscal year as per the official estimates, and when increased by the rate of new market borrowings, 8 lakh crore will be a probable result. Analysts are calling on the cautious financial practices and more emphasis on raising state revenues to balance the financial prospects of the state.
