On June 22, Bengal’s new government will present its first budget since taking office.
More than an accounting exercise, a budget is a statement of priorities. It tells citizens, investors and businesses what kind of future the government intends to build.
The government begins with a large fiscal commitment. The 2026-27 interim budget projected expenditure of more than ₹4 lakh crore, larger than the budgets of most Indian states. Bengal also spends some ₹50,000 crore annually on direct welfare transfers and assistance schemes. These programmes provide an important social safety net, but their long-term sustainability depends on a growing economy that generates jobs, incomes and tax revenues.
The challenge is compounded by the state’s substantial debt burden, which limits fiscal flexibility and increases the importance of directing expenditure towards investments that raise productivity and future revenues.
Bengal’s economy stands at approximately $250 billion today. The ambition over the next five years should be to double it to $500 billion. Every major spending decision should therefore be judged against a simple test: will it help the state grow faster?
Across India, the most successful states have demonstrated that prosperity depends less on the size of spending than on its quality. Gujarat invested for decades in ports, highways, industrial estates and reliable power. Tamil Nadu combined manufacturing growth with sustained spending on education, skills and public health. Both focused on creating conditions in which businesses could invest and employment could expand.
Bengal’s biggest economic challenge is competitiveness. Investors compare locations on a handful of fundamentals: the cost of power, the efficiency of logistics, the quality of labour, the availability of industrial land and the ease of navigating regulations. Investment ultimately flows to places that offer the most attractive combination of profitability, predictability and growth.
If these fundamentals are addressed, Bengal can become a major centre for labour-intensive manufacturing. Geography strengthens the case: located at the crossroads of eastern India, Bangladesh, Nepal and Bhutan, the state is well placed to serve as a hub for trade, logistics and exports. Apparel, food processing and furniture are particularly attractive opportunities.
These industries create employment at scale and provide pathways from low-income work to middle-class prosperity. A garment industry even half the size of Bangladesh’s would employ millions of workers, many of them women.
Agriculture must also be connected more directly to industry. Bengal possesses natural advantages in shrimp, fish, mangoes, rice and horticulture.
Thailand has demonstrated how agricultural strength can be transformed into a globally competitive food-processing sector through investments in cold chains, packaging, testing laboratories and export infrastructure.
The state’s role is to create the enabling environment; private enterprise can build the factories, brands and export networks. Education, healthcare and welfare, the state’s largest expenditure heads, must be judged by outcomes, not allocations.
As the legal scholar Cass Sunstein has argued, public policy should increasingly be subjected to rigorous cost-benefit analysis. The relevant question is not how much money is spent, but what results it produces.
Pratham’s latest Annual Status of Education Report highlights substantial gaps in foundational learning. Spending on education should be matched by measurable improvements in literacy, numeracy, employability and workforce participation.
The same principle applies to healthcare. Bengal should become a destination for healthcare rather than a source of patients. Strengthening primary care, district hospitals, medical colleges and specialised centres of excellence would improve outcomes, generate skilled jobs and attract patients from across eastern India and neighbouring countries.
Welfare remains necessary, but wherever possible it should build capability, not dependency.
Economic assistance should be accompanied by opportunities for skill development, vocational training and employment. The objective should be a clear pathway from welfare to self-sufficiency.
North Bengal’s tea sector deserves greater attention. Tea should be viewed not simply as an agricultural commodity but as the foundation of a broader rural economy. Tea tourism, wellness retreats, medicinal plant cultivation, tea extracts, packaging facilities near origin and sustainable timber programmes based on shade trees can all generate additional income streams.
With the right policy framework, Darjeeling, the Dooars and the Terai could become centres of high-value rural enterprise instead of merely producing bulk agricultural output.
The budget should give weight, too, to science and technology. The interim budget allocated less than ₹200 crore to this sector, a modest sum for a state with Bengal’s scientific and intellectual heritage.
Artificial intelligence and quantum computing are attracting unprecedented levels of global investment and will increasingly shape manufacturing, healthcare, logistics and public services.
Just as P.C. Mahalanobis and the Indian Statistical Institute made Bengal a global centre for statistical science in the 20th century, the state should aspire to become India’s leading hub for artificial intelligence and quantum computing in the 21st century.
A focused technology mission bringing together universities, research institutions and industry could attract talent, create high-value jobs and strengthen the competitiveness of existing industries.
Execution matters as much as allocation. Roads, ports, industrial parks and power infrastructure create growth only when they are completed on time and operate effectively.
Competitiveness depends equally on predictable regulation, efficient administration, confidence in the rule of law and a business environment in which contracts are enforced and investments protected.
Bengal does not lack resources, talent or opportunity. The question is whether this budget can begin converting those advantages into sustained economic growth. If the state is serious about a $500-billion economy within five years, every rupee must answer to one standard: does it create growth, jobs and opportunity?