Budget Allocation 2026–2027: The Darjeeling–Kalimpong District Economy Is Projected to Cross ₹1 Lakh Crore by 2030

An Analysis of Hill Areas, Revenue Extraction, and Budget Estimates by Mithilesh Baraily

1. Introduction

The fiscal relationship between the Governments of West Bengal and India, especially with regard to the hill districts of Darjeeling and Kalimpong, reveals a persistent pattern of neglect that goes beyond administrative oversight. It reflects a deeper form of epistemic oppression and injustice, wherein the developmental knowledge, priorities, and lived realities of the hill population are systematically marginalised in state budgeting and policy execution.

Despite the region’s sustained economic contribution and strategic significance, public expenditure allocations for the hills remain disproportionately low, erratic, and administratively constrained, undermining both democratic equity and developmental justice.

2. Institutional Marginalisation in Budgetary Architecture

The Government of West Bengal operates through 79 departments. However, allocations for the hill areas are channelled primarily through Major Head (MH) 2551 – Hill Area, under which only 19 departments were covered up to FY 2023–24. By FY 2026–27, this number has reportedly declined further to 11 departments, signalling not decentralisation but a progressive withdrawal of the state from hill-specific development responsibilities.

This contraction of departmental coverage has occurred without any corresponding increase in untied grants, sectoral flexibility, or direct developmental outlays, thereby hollowing out the very purpose of a hill-area-specific budget head.

3. Disproportionate Budget Allocation: Evidence from FY 2023–24

For FY 2023–24, West Bengal’s total Budget Estimate (BE) stood at ₹3,39,162 crore, of which the allocation under MH 2551 (Hill Area) amounted to only ₹1,088 crore—approximately 0.32% of total state expenditure.

This figure is stark when juxtaposed against the state’s own planned development expenditure levels, which hover around 0.9% at their lowest. In effect, the hills are expected to develop with barely one-third of even the state’s minimal planned development effort.

Moreover, several major centrally sponsored social schemes—particularly in health, education, livelihoods, and infrastructure—are either partially transmitted or not transmitted at all to the hill districts, further compounding fiscal deprivation.

4. Social Justice Funds and Their Withdrawal

Equally concerning is the erosion of constitutionally intended social justice financing. Funds previously routed under Major Heads 789 and 796 (for Scheduled Castes and Scheduled Tribes) have been removed or rendered ineffective in the hills.

There is no clearly earmarked provisioning for Other Backward Classes (OBCs) or minority communities, despite their substantial demographic presence in Darjeeling and Kalimpong. This selective invisibilisation of social categories in budgetary design constitutes epistemic injustice: affected communities are excluded not only from resources but also from recognition itself.

5. FY 2026–27: Administrative Spend Without Development

Despite the region’s massive economic output, the developmental allocation under Major Head 2551 remains stagnant at approximately 0.3% of the state budget. The disparity between contribution and allocation represents a systemic transfer of wealth from the hills to the plains.

The fiscal pattern worsens in the Budget Estimates cycle of 2025–26 and 2026–27. While West Bengal’s overall budget for FY 2025–26 stands at approximately ₹3,89,194.09 crore (₹3.89 lakh crore), the allocation for hill areas is revealing.

FYBE 2025–26:

• Developmental allocation: ₹2,153,345,000 (≈ ₹215.33 crore)

• Administrative expenditure: ₹8,847,006,000 (≈ ₹884.70 crore)

• Total hill-area allocation: ≈ ₹1,100 crore

• Share of total state budget: approximately 0.2828%

FYBE (Interim) 2026–27:

Total state budget stands at approximately ₹4,06,084.17 crore (₹4.06 lakh crore).

• Developmental allocation: ₹2,106,330,000 (≈ ₹210.63 crore)

• Administrative expenditure: ₹9,238,081,000 (≈ ₹923.81 crore)

• Total hill-area allocation: ≈ ₹1,134.44 crore

• Share of total state budget: approximately 0.2794%

Crucially, the development budget is effectively negligible, with expenditure overwhelmingly consumed by administrative overheads. This represents a governance model where administration substitutes development, and presence substitutes performance.

6. Fiscal Contribution Versus Reinvestment

For FY 2024–25, GST collections from Darjeeling and Kalimpong alone amounted to approximately ₹1,100 crore—nearly equivalent to the entire hill-area allocation under MH 2551. This implies that the region generates at least as much indirect tax revenue as it receives in total budgetary outlay, even before accounting for non-GST revenues, fees, tourism-linked taxes, and state-shared central transfers.

At the same time, West Bengal’s outstanding public debt exceeds ₹6 lakh crore, constraining fiscal space and reinforcing a pattern where peripheral regions absorb extraction without proportional reinvestment.

At constant (2004–05) prices, West Bengal’s estimated GSDP stood at ₹3,23,417 crore in 2011–12 (P), of which the undivided Darjeeling district contributed ₹9,166.73 crore. At current prices, the state’s GSDP was estimated at ₹4,80,375.85 crore, with Darjeeling’s share amounting to ₹14,916.92 crore, approximately 3.1%.

Per capita income in the district exceeded the state average. At constant prices, Darjeeling ranked second after Kolkata in 2013–14, while at current prices its per capita income stood significantly higher than the state average.

Despite these indicators, the district has not been classified as a “Minority Concentration District”, resulting in systematic exclusion from targeted developmental planning and fiscal prioritisation.

7. Comparative Fiscal Perspective: Sikkim

A brief comparison underscores the anomaly. For FY 2025–26, Sikkim’s state budget stands at approximately ₹16,196 crore, with a projected GSDP of ₹57,000 crore, reflecting annual growth of about 8%. This is achieved despite rising public debt projected at ₹22,000 crore or higher.

8. Economic Capacity and Future GDDP Projection (Darjeeling–Kalimpong) up to 2030

According to NABARD District Profiles, the undivided Darjeeling district’s GDDP stood at ₹13,681.13 crore in 2011–12. Applying conservative growth trends from West Bengal’s SDP/DDP series, projections at current prices indicate that by FY 2029–30, the hill economy will cross the ₹1,07,000 crore mark.

The data shatters the myth that the hills cannot sustain themselves. With a projected ₹1 lakh crore economy, Darjeeling and Kalimpong are not just viable—they are a powerhouse.

Between FY 2015–16 and FY 2025–26, the region generated approximately ₹68,000 crore in public revenue. Between FY 2024–25 and FY 2030–31, this figure is estimated to rise to ₹1.12 lakh crore.

9. Fiscal Implications of Future Growth

By 2030, under conservative assumptions:

• Annual GST and indirect tax contribution is likely to exceed ₹5,000 crore

• The region’s economic scale will be comparable to smaller Indian states and Union Territories

• Continued under-allocation will deepen fiscal asymmetry and democratic alienation

These projections reinforce that Darjeeling–Kalimpong is not fiscally dependent but structurally under-recognised.

10. Epistemic Oppression and Democratic Deficit

Darjeeling and Kalimpong function as economic usufructs for West Bengal—territories from which resources are extracted without equal political, cultural, or developmental integration. The under-allocation of funds, withdrawal of social justice provisions, and administrative dominance over development constitute epistemic oppression.

The verdict is clear: the Darjeeling–Kalimpong region is not a recipient of aid; it is a generator of wealth. Policy must reflect this reality. The hills are a ₹1 lakh crore asset, not a liability.

Data Sources: West Bengal Budget Estimates, NABARD District Profiles, GST Data

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Mithilesh Baraily is a public policy and budget analyst focusing on fiscal federalism, regional development, and social justice. He was an Entrepreneur in Residence (EIR) Fellow (2025) under the National Initiative for Developing and Harnessing Innovations (NIDHI). He is also an ASIIM Fellow (2023–2026) under the Ambedkar Social Innovation Incubation Mission and a SPARSH Fellow (2022–2023). His work examines budgetary equity, revenue extraction, and development asymmetries, with particular emphasis on the Darjeeling–Kalimpong region and hill economies..He could be contacted at mithileshbaraily@pm.me