The euphoria about the election results has finally settled down, but it also unfolds the next stage – the economic impact, especially for key states. According to Elara Securities, West Bengal is set to see a new wave of change in infrastructure, industrialisation, and capital expenditure revival given the political shift after 15 years.

The brokerage said that the optimism is stemming from trends seen in politically pivotal states such as Uttar Pradesh, Odisha, and Assam, where “BJP-era governance has delivered a superior macroeconomic and fiscal outcome relative to the prior administration, with particularly pronounced outperformance on capital expenditure, new investment, industrial activity, and demand-side indicators.”

Can the BJP govt in West Bengal aid economic revival of eastern India

Here’s why Elara believes “double engine” governance in West Bengal could drive economic growth, benefiting industries as well as workers.

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Capex push likely to drive growth

Elara Securities said West Bengal’s capital outlay currently remains low at around 2% of GSDP, compared to higher levels in BJP-ruled states such as Odisha and Uttar Pradesh. They believe that a bringing ‘double engine’ governance to the state could trigger a strong capex cycle in the state. 

Elara Securities noted that higher infrastructure spending could support asset creation, especially in roads, bridges, and water-related projects, while also improving overall economic activity.

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The BJP had proposed large infrastructure projects, including deep-sea ports, highways, railway expansions, and airport development in their manifesto. Plans to set up industrial parks, boost logistics, and revive sectors such as tea and jute also form part of the broader economic agenda.

Welfare promises may raise fiscal costs

The BJP’s manifesto for West Bengal includes several welfare measures such as direct cash transfers of Rs 3,000 per month to women, Rs 9,000 per year to farmers, and Rs 3,000 per month to unemployed youth, along with a higher MSP for paddy. The report estimates these measures could add Rs 7,000–10,000 crore in recurring fiscal costs.

Along with BJP also promised to implement Ayushman Bharat to provide free medical coverage of up to Rs 5 lakh per family. 

GDP contribution may improve

Elara Securities also highlighted that West Bengal’s contribution to India’s GDP has declined in recent years. This trend may reverse if investment-led growth picks up. It estimates that a policy-driven push in industrialisation and job creation could add 35–40 basis points (bps) to India’s GDP over the next five years.

Industrial activity seen picking up

Elara Securities also highlighted that several companies have exited West Bengal over the past decade, weighing on industrial growth. However, they expects a turnaround under a more investment-focused policy framework.

Key sectors to benefit

Infrastructure and capital goods companies, along with cement makers and railway-linked firms, are expected to gain from higher spending. Banks with strong exposure to MSMEs could also benefit from improved credit demand and policy stability.

Reverse migration may impact labour markets

The expected improvement in economic prospects in West Bengal could lead to reverse migration, according to Elara Securities. It may also create labour shortages in states such as Kerala, Karnataka, and Maharashtra. This could push up wages and accelerate mechanisation in sectors like agriculture.

Conclusion

Elara Securities believes a BJP win in West Bengal could mark the beginning of a new investment cycle in West Bengal, with stronger infrastructure spending, rising industrial activity, and a gradual shift in India’s growth engine towards the eastern region.