By Ashok Gulati & Bidisha Chanda, respectively, Distinguished Professor and Research Associate at ICRIER
The recent round of state elections, spanning West Bengal, Assam, Tamil Nadu, Kerala, and Puducherry, has clearly shown, if nothing else, that Indian democracy is very much alive and kicking. It has redrawn India’s political map, with the Bharatiya Janata Party (BJP) now staking a stronger claim from West to East. While the BJP has won a third term in Assam, its maiden victory in Bengal is particularly noteworthy.
Mamata Banerjee’s decision to not resign gracefully from the chief minister’s post after losing is unbecoming of India’s democratic traditions. There is no dearth of debate over how and why the Trinamool Congress (TMC) lost its 15-year hold on the state, with as many explanations as there are experts. We will leave that crowded space aside and focus instead on the more pressing question of revdis (freebies) vs development. The challenge before the new government is straightforward: can it move the state from its current 16th rank in per capita income (PCI) to the levels of Haryana (3rd) and Gujarat (5th) that have the advantage of longer governance experience?
During Banerjee’s tenure from 2011-12 to 2025-26, Bengal recorded an average annual growth rate (AAGR) of GDP of just 5%, the lowest among all major states and also lower than India’s 6.1% (at constant 2011-12 prices). But this is not merely a story of one government’s tenure. Over the last 25 years (2000-01 to 2025-26), the state’s GDP growth averaged only 5.6%, against the national average of 6.3%. It is, therefore, hardly surprising that the state’s ranking in PCI terms slid from 11th to 16th over this period.
That could well be one reason why the BJP won in Bengal. But another widely discussed factor was the lack of good governance, which dissuades private sector investments. Yet another factor could be the special intensive revision. However, the debate has not focused much on the issue of freebies, which could have played a critical role in the BJP’s victory. Freebies have now become a standard electoral weapon; across states, competitive populist transfers are becoming the norm.
Take, for instance, Tamil Nadu. The state has pioneered two trends. First, it witnessed the rise of yet another film star in politics. The state has continued its long tradition of cinematic icons turning into mass political leaders, this time with actor C Joseph Vijay. Second, and perhaps more consequentially, the state institutionalised the culture of freebies in Indian politics. What began as a developmental intervention through the noon meal scheme for schoolchildren eventually evolved into a broader electoral strategy: give citizens freebies, and votes will follow. Is this bribe for votes or welfarism?
Vijay’s promised welfare bill in Tamil Nadu, if implemented, would cost the state exchequer roughly Rs 0.99 lakh crore, against a total budget of Rs 3.93 lakh crore. And this revdi culture persists even when the state recorded the sixth-highest AAGR of GDP, at 7.4% between FY01 and FY26. One could argue that the GDP growth bypasses the masses who live more on welfare schemes. But there is more politics for votes in these freebies than true welfarism.
Bengal is no different. The BJP did not really introduce a new freebie model; it merely scaled up what the TMC had put in place. It proposed to double the existing transfers for women— Rs 1,500 per month for those from general category and Rs 1,700 for reserved category women—to Rs 3,000 per month for all, irrespective of caste. In a state of roughly 100 million people, about 49.3 million are women, of whom nearly 35.8 million are above the age of 20 years (ministry of health and family welfare, 2019). Even if one takes this as a rough eligibility benchmark, the annual cost of such a scheme would be in the vicinity of Rs 1.29 lakh crore. Against a total state budget of Rs 3.96 lakh crore for FY27, this single promise could absorb almost one-third of the total expenditure. If the government decides to go ahead with this bold scheme, the obvious question is: how does it plan to finance such a commitment without squeezing development expenditures? Will it not slow down the pace of development even further?
It must be acknowledged that the BJP can build on some of the state’s existing opportunities. West Bengal’s multidimensional poverty headcount ratio declined sharply from 58% in 2005-06 to just 9% in 2022-23 (NITI Aayog, 2024). Despite this substantial reduction in poverty, Bengal’s PCI ranking has remained persistently among the lower tier of states. This suggests that more than an accelerated growth model, distribution of revdis has contributed to poverty reduction. This may not create ample jobs. No wonder, the BJP promised Rs 3000/month to unemployed youths in its manifesto.
But such social security measures can only be meaningful only in the short run. Actual jobs need to be created. And that, inevitably, requires creating an environment where private investors are willing to not just enter but also stay. Before any government can seriously pursue such ambitions, it must first confront the condition of the state’s finances. West Bengal is currently the second-most indebted major state in India, with total outstanding liabilities estimated at 38.9% of GSDP in 2026, second only to Punjab’s 46.4% and well above the national average of 29.2% (State Finances, 2025-26). This is where the new government’s real challenge begins: balancing welfare commitments with development expenditures, to place the state on a higher growth trajectory.
The lotus has bloomed, no doubt, in the East. But if this victory is based on promises of revdi rather than development, it may not mean real and sustainable poriborton (change). For the new government, the test will begin now.