SFAR West Bengal 2024-25
State Finances Audit Report
Government of West Bengal
West Bengal's economy recorded a moderate growth (9.91 per cent) in Financial Year (FY) 2024-25 compared to previous year. The Gross State Domestic Product (GSDP) (at current prices) grew at a Compounded Annual Growth Rate (CAGR) of 9.57 per cent from ₹ 7.97 lakh crore in 2015-16 to ₹ 18.15 lakh crore in FY 2024-25.
During FY 2024-25, the State recorded a Revenue Deficit of ₹ 39,727 crore (2.19 per cent of GSDP). The Fiscal Deficit of the State was ₹ 61,924 crore (3.41 per cent of GSDP), which was within the FRBM target of 3.50 per cent of GSDP. Total liabilities stood at 38.66 per cent of GSDP in 2024-25, breaching the FRBM target of 38.00 per cent.
Ten year trend analysis, covering the period from 2015-16 to 2024-25, of major fiscal and economic parameters of the State showed that Revenue Expenditure increased at a faster pace (Compound Annual Growth Rate (CAGR) of 8.78 per cent) vis-a-vis Revenue Receipts (CAGR of 7.69 per cent). Consequently, the State incurred Revenue Deficits throughout the period from 2015-16 to 2024-25. During this decade, Fiscal Deficit also expanded sharply at a CAGR of about 12.83 per cent leading to greater dependence on borrowings.
Overall, the growing revenue deficit and rising fixed liabilities create risks for the State's financial health, even though the fiscal deficit is within the limit prescribed in WBFRBM (Amendment) Act 2025. Persistently high committed expenditure on salaries, pensions and interest payments coupled with increasing subsidy and social sector commitments constrained fiscal correction. The State was thus unable to create the fiscal space necessary for capital investment.
Revenue Receipts (₹ 2,13,700 crore) though grew by 6.71 per cent in FY 2024-25, it did not fully match economic growth as revenue buoyancy (0.68) and State's own revenue buoyancy (0.92) stayed below one, indicating limited responsiveness of revenue collections to economic growth. While Grants-in-Aid from GoI showed a decreasing trend and the devolution (State's share of Union Taxes and Duties) increased, the contribution of overall transfers from GoI to the revenue stood at 52 per cent in FY 2024-25 vis-à-vis 56 per cent in FY 2020-21. This highlighted the need for stronger own revenue mobilisation by the State.
Revenue Expenditure consistently accounted for over 112 per cent of Revenue Receipts during FYs 2020-25 and stood at 118.59 per cent in FY 2024-25, reflecting fiscal stress. Its significant share in total expenditure indicates structural rigidity and leaves little fiscal space for capital investment. The share of Committed Expenditure within Revenue Expenditure ranged between 54.93 per cent and 62.86 per cent during FYs 2020-25, and as a proportion of Revenue Receipts between 64 per cent and 75 per cent over the same period. This highlights that a large portion of the State's receipts are being used just to meet fixed obligations. It was noted that in FY 2024-25, 41 per cent of the revenue expenditure was met from net borrowings adding to future liabilities.
The committed expenditure (₹ 1,39,202 crore) coupled with Subsidy expenditure (₹ 19,444 crore) absorbed nearly 74 per cent of Revenue Receipts of West Bengal in FY 2024-25 leaving only 26 per cent fiscal space for developmental and capital spending. Compared to the previous year, in FY 2024-25 subsidy increased sharply by ₹ 8,968 crore (85.61 per cent). The increase was mainly due to increase of ₹ 5,858 crore on account of State Subsidy for purchase of paddy for distribution of Rice in PDS and ₹ 282 crore on account of Subsidy to West Bengal State Electricity Distribution Company Limited for subsidisation in power tariff to its Consumers.
Capital expenditure (₹ 21,622 crore) during FY 2024-25 constituted only 1.19 per cent the GSDP of the State. In FY 2024-25, it fell by 25 per cent (₹ 7,341 crore) vis-à-vis the previous financial year (₹ 28,963 crore). Audit found that, during FY 2024-25, the State Government misclassified ₹ 1,031.84 crore of expenditure of Revenue nature as Capital Expenditure, which inflated the Capital Expenditure to that extent.
As of March 2025, overall outstanding liability of the State stood at ₹ 7,01,724 crore. There was decline in the Debt-GSDP ratio from 42.60 per cent in FY 2020-21 to 38.66 per cent in FY 2024-25. High liabilities meant that a large share of future revenue would go towards debt servicing, which may reduce flexibility for future spending. Interest payments relative to revenue receipts fell from 22.77 per cent to 21.25 per cent during FY 2020-21 to FY 2024-25. However, the ratio of interest payments to revenue receipts exceeded the normative cap during the five-year period, reflecting a rigid expenditure structure and rising debt-servicing burden, which limited the resources available for developmental spending.
Of the total outstanding public debt (₹ 6,11,645 crore), more than 30 per cent will become payable in the ensuing seven years (₹ 1,87,547 crore (30.66 per cent)). Overall, high repayment ratios, recurring primary deficits and heavy interest burden point to underlying fiscal stress. The State needs to continue to strive to increase revenue, manage expenditure efficiently and borrow prudently to strengthen long-term debt sustainability and fiscal resilience.
During FY 2024-25, against the total budget provision of ₹ 3,90,638.04 crore, the State incurred an expenditure of ₹ 3,19,975.79 crore, resulting in an overall savings of ₹ 70,662.25 crore (18.09 per cent). Similar trend of savings ranging between 19.31 per cent to 20.99 per cent was observed during FY 2020-21 to FY 2023-24.
It was noticed that during FY 2024-25, supplementary provisions of ₹ 4,489.31 crore in 16 grants proved unnecessary, as the expenditure did not come up to even the original provisions. Similarly, supplementary provisions of ₹ 5,119.18 crore in 13 grants proved excessive as full amount of supplementary provisions could not be utilised. This points not only to inefficient financial planning but also raises doubt about capacity of the State to spend efficiently.
Though there was overall savings, during FY 2024-25, excess expenditure of ₹ 13,486.92 crore was incurred under seven grants and one appropriation which requires regularisation as per Article 205 (1) (b) of the Constitution. Such unregularised excess expenditure pertaining to the FYs 2009-24 came to ₹ 57,263.62 crore.
As per the PFMS portal, the State Government received ₹5,889.49 crore being Central share during FY 2024-25 in its Treasury account. The State Government transferred Central share of ₹ 5,604.85 crore and State share of ₹ 12,447.11 crore to the SNAs during FY 2024-25. As per PFMS portal, ₹ 8,296.51 crore were lying unspent in the bank accounts of SNAs as on 31 March 2025.
Government of West Bengal initiated the process of onboarding to SNA-SPARSH platform in January 2025. The funds lying in the SNA Accounts were to be refunded before onboarding to SNA-SPARSH. Audit noted that only 14 CSSs started functioning through SNA-SPARSH instead of the existing 67 SNAs in the State till March 2025. Again, in 11 out of 14 CSSs, an amount of ₹ 93.89 crore was lying under the concerned SNA accounts till 31 March 2025.
Cess proceeds amounting to ₹ 1,809.66 crore, credited to the Consolidated Fund of the State, during FY 2024-25, had not been transferred to the Public Account as the GoWB did not create specific funds to transfer these proceeds. This resulted in understatement of Revenue Deficit, Fiscal Deficit and cumulative liabilities in Public Account.
As of 31 March 2025, UCs amounting to ₹ 1,35,686 crore were outstanding compared to ₹ 2,56,106 crore in the beginning of FY 2024-25 registering a decline of 47 per cent pointing to positive efforts taken by the Government. However, Government needs to monitor this aspect closely as non-submission of UCs is fraught with the risk of misutilisation.
As of 31 March 2025, 4,454 Abstract Contingent (AC) bills amounting to ₹ 568.98 crore remained pending adjustment, including 807 AC bills (₹133.87 crore) drawn in FY 2024-25. It was noted that the amount of outstanding AC Bills reduced by 14 per cent in FY 2024-25 relative to FY 2023-24 (₹ 661.97 crore in 6,081 bills). Considering that non-adjustment of advances for long periods is fraught with the risk of misappropriation, close monitoring by respective DDOs is required for ensuring submission of Detailed Contingent bills.
During FY 2024-25, an amount of ₹ 535.59 crore was transferred from the Consolidated Fund of the State to PD Accounts. Audit noted that out of the transfers of ₹ 535.59 crore during the year, ₹ 180.49 crore (34 per cent) was transferred in March 2025, of which ₹ 53.62 crore was transferred on the last working day of March 2025 indicating an attempt to circumvent the lapsing of budget provision. Audit also came across cases where funds were parked in the PD accounts despite West Bengal Treasury Rule prescription to remit the unutilised funds in PD Accounts at the end of the financial year back to the Consolidated Fund.
As of 30 September 2025, out of 94 ABs that were required to submit their annual accounts to the CAG of India, only three ABs had submitted accounts up to 2024-25. Of the remaining 91 ABs, five had not submitted accounts since their inception and two since 1998-99. There were 14 ABs, the accounts of which have not been submitted for more than six years. In total, against 91 ABs, 421 annual accounts due up to 2024-25 remained pending as of 30 September 2025.