Statsguru: Big welfare promises confront strained state economies

Welfare promises dominate politics even as several states face rising fiscal stress and uneven economic capacity

The election results across Assam, Kerala, Tamil Nadu , West Bengal and Puducherry have brought welfare-heavy manifestos back into focus. While winning parties promised welfare expansion, the economic and fiscal positions of these states vary, shaping their capacity to deliver on these commitments.

 Winning parties across the five Assemblies focused strongly on welfare measures. (Chart 1)   

Tamil Nadu, Kerala and Puducherry have remained well above the national average in per capita income for years, while Assam and West Bengal have remained below the national average. (Chart 2)   

 

Kerala and West Bengal continued to carry relatively higher debt burden at close to 38 per cent of GSDP, while Assam’s fiscal deficit has widened sharply in recent years.

(Chart 3) 

 

Assam recorded the highest capital outlay as a share of GSDP, reflecting a stronger infrastructure push compared with the other states.(Chart 4) 

Tamil Nadu had the largest share of FDI equity inflows among the five, far ahead of the others. (Chart 5) 

 

Unemployment rate declined across most states every year till 2025. But only West Bengal has been reporting below national average unemployment rate. (Chart 6)