West Bengal to Pursue Dual-Track Infrastructure Development, Capital Expenditure Poised for Significant Increase

West Bengal's Capital Expenditure Expected to Rise Under New BJP Government

West Bengal is likely to see its capital expenditure increase by at least three percentage points in the next budget, according to a Moneycontrol analysis of fiscal trends of states that saw a change in the ruling party.

A BJP government will be sworn in West Bengal for the first time on May 9, following the party's victory in the recently concluded elections, securing 207 seats in the 294-member house.

The analysis of state budgets reveals that states transitioning to a new government on average increase capital outlay as a share of expenditure from 15.8 percent under previous administrations to 19 percent, a rise of 3.1 percentage points. This comparison is based on average spending trends for the three years before and after a change in government.

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Prior to the introduction of the Centre's interest-free capex loan scheme in 2020-21, the increase in capital spending was more moderate in transitions, averaging close to one percentage point.

In several BJP-ruled states, infrastructure-focused spending saw sharp increases following a change in government. For example, in Assam, capital outlay rose from 9.6 percent to 16.1 percent of total expenditure, an increase of 6.5 percentage points when the BJP won its first term in 2016.

Other states that saw significant increases in capital spending include Rajasthan, which saw a rise from 9.3 percent to 14.7 percent, and Jharkhand, which recorded an increase from 18.6 percent to 22.7 percent.

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The largest increase was recorded in Madhya Pradesh, where capital expenditure rose in double digits after the BJP came to power in 2003-04. Bihar also saw a sharp increase in infrastructure spending from 2006-07, with capex levels roughly doubling compared with the previous administration.

However, not all BJP-governed states followed the same trajectory. Uttar Pradesh, Uttarakhand, and Goa experienced periods where capital expenditure either declined or remained volatile despite political continuity.

For West Bengal, even a three-percentage point increase in capex could materially alter the composition of state spending towards infrastructure, given the relatively high share of revenue expenditure in recent budgets. The state had budgeted capital outlay at 13 percent of total expenditure in 2025-26, below the national average of 16.2 percent.

In contrast, Madhya Pradesh and Uttar Pradesh allocated nearly 28 percent of expenditure toward capital spending during the period.