Tamil Nadu and West Bengal both ended 2023-24 with revenue deficits, but the similarity conceals different fiscal challenges. The southern state's deficit is expenditure-driven despite a strong revenue base, whereas the eastern state reflects weaker revenues compounded by a heavy debt-servicing burden.
The divergence begins with their economic structures. TN's per-capita GSDP in 2023-24 stood at about ₹3.53 lakh, nearly twice WB's ₹1.81 lakh, which remains below the national average. TN has a diversified industrial base, spanning automobiles, electronics and textiles. WB, with a population density of 1,029 persons per sq km against TN's 555, must finance public services for a far denser, lower-income population.
