West Bengal Chief Minister Mamata Banerjee Seeks Fourth Term Amid Economic Challenges

West Bengal Chief Minister Mamata Banerjee is seeking a fourth term in office as the state polls on April 23. The TMC has championed welfare schemes during its tenure and recorded a dramatic five-fold increase in GSDP. But West Bengal is also facing a massive debt burden and a declining share of the national GDP. The elections will likely be a critical crossroad for the Mamata Banerjee-led party, BJP has trained its poll campaign on fiscal health and job creation. Its Sankalp Patra, released in early April, promised higher direct cash transfers and vowed to transform Bengal into a manufacturing hub rather than a consumption-driven economy. In the last 15 years of Mamata’s rein Gross State Domestic Product rose from approximately Rs 4.61 lakh crore in 2010-11 to an estimated 21.48 lakh crore for 2026-27. The growth has been fuelled by a robust service sector and a massive expansion in rural demand, driven by welfare programs such as Lakshmir Bhandar (cash transfers for women) and Kanyashree. The Bengal government had also increased Lakshmir Bhandar payouts by Rs 500 and introduced a Rs 1500 monthly allowance for unemployed youth. “We are responsible to the people of the State…1.72 crore people have been lifted out of poverty between 2013 and 2023. More than 2 crore people have gained meaningful employment,” Banerjee said in December 2025. According to the NITI Aayog Fiscal Health Index 2026, West Bengal is one of five states facing “persistent fiscal stress due to rising debt, sustained deficits, and modest revenue growth”. Critics argue that the high levels of debt also limit its capacity for capital expenditure — consequently curtailing its ability to ramp up manufacturing and high-speed infrastructure. “Aspirational states (West Bengal, Kerala, Andhra Pradesh and Punjab) face persistent revenue and fiscal deficits often breaching FRBM norms, elevated debt levels of roughly 35-45% of GSDP, committed expenditure accounting for about 50-60% of revenue receipts, large interest payments exceeding 15-20%, and relatively low developmental spending,” the report adds. The TMC had inherited high debt from the previous Left Front government with a debt-to GSDP ratio over 40%. Nearly 21% of the state’s total revenue was being spent just on paying interest on old loans. Matters have not drastically improved over the past 15 years — with the sheer volume of debt skyrocketing from Rs 1.92 lakh crore to approximately 7.26 lakh crore. This has been counterbalanced by the significantly faster economic growth under the TMC. The state has also seen its tax collection increase sharply during this time — reducing overall reliance on central grants. The TMC has projected itself as a national leader in ‘grassroots entrepreneurship’ — with party leaders highlighting the creation of approximately 2.5 crore jobs across various sectors. Bengal also maintains a lower-than-national-average unemployment rate of 4.14%. But much has been said about the nature of these jobs, as employment remains somewhat concentrated in the informal MSME sector or through rural work schemes like Karmashree. Mamata Banerjee ended 34 years of Communist Party of India (Marxist) rule to become the first female chief minister of West Bengal in 2011. The TMC-Congress campaign had focused extensively on the economic decline of the state under the previous government. A CAG Report for the year ended 31 March 2011 reveals that Bengal had been borrowing heavily to pay its bills — with almost nothing left over to actually build anything. A striking 76% of all revenue expenditure was already ‘committed’ for salaries, interest payments, pensions, subsidies — leaving almost no fiscal room for discretionary spending. Salaries alone had ballooned 216% above Finance Commission projections to Rs 24,954 crore. The debt-to-GSDP ratio fell as the economy grew faster under Mamata Banerjee, while revenue deficit as a share of GSDP improved. Bengal has seen its GSDP growth consistently outpace the national average since her government took over. But a 2021 CAG report reveals that even a decade of TMC rule had failed to remove the structural problems plaguing the state (debt-funded consumption, low capex, weak accountability). “West Bengal’s real GSDP has grown at an average rate of 4.3%during the period from 2012-13 to 2021-22 compared to the national average growth of 5.6%. The State’s share in the national GDP has decreased from 6.8% in 1990-91 to 5.8% in 2021-22. Its per capita income is 20% below the national per capita income, as of 2021-22,” notes a NITI Aayog report from March 2025. The Interim Budget presented by FM Chandrima Bhattacharya in early February allocated Rs 46,293.09 crore to the Finance Ministry. This likely includes debt servicing, interest payments, and other fiscal obligations — although not broken down within the Budget speech. Another Rs 46,293.09 crore was allocated to the Panchayats & Rural Development department. The Health department was allocated Rs 22,338 cr (driven significantly by the Swasthya Sathi scheme covering 2.45 crore families) while social welfare received Rs 42,114 cr and school education Rs 41,235 cr. Data shared by the West Bengal Finance Ministry indicates that the total accumulated debt by, has been pegged at Rs 8,15,891.35 crore by the end of March 2027. The Budget estimates for FY27 also project a substantial revenue deficit of Rs 21,759.34 crore and market loans totalling Rs 80,444.55 crore. A significant portion of the capital expenditure is also dedicated to repayment of loans to the central government and other entities (amounting to Rs 44,606.53 crore and up from the Rs 33,795.10 crore projected in the 2025-2026 revised estimates). The total revenue expenditure is projected to rise to Rs 3,09,551.07 crore — with social services alone accounting for Rs 1,62,611.72 crore.