West Bengal Chief Minister Mamata Banerjee declared on Monday, September 22, 2025, that the Union government should refrain from taking credit for the recent Goods and Services Tax (GST) rate cuts. She asserted that these revised rates would inflict a substantial ₹20,000 crore loss on the State’s exchequer.
Her comments coincided with the nationwide implementation of a simplified two-tier GST system, which now taxes the majority of goods and services at 5% and 18%, as announced previously.
“The Central government isn’t spending a single paisa on these GST rate cuts; all the funds are coming directly from the State government’s coffers. One individual is claiming all the glory for this, but will he actually provide us with the necessary funds?” the Chief Minister questioned during the inauguration of a Durga Puja pandal in Kolkata.
Ms. Banerjee also indicated that her government was preparing an advertisement to highlight this issue, which would be published shortly.
“While I am pleased that these GST rate reductions have taken place and will benefit the public, these cuts directly impact us. The people of West Bengal will endure a ₹20,000 crore revenue shortfall from the State exchequer due to these changes,” she elaborated.
The Chief Minister recalled being the first to write to Prime Minister Narendra Modi, advocating for reduced GST rates on health insurance. She suggested that while the Union government might find ways to compensate states governed by the Bharatiya Janata Party (BJP), non-BJP ruled states like West Bengal would suffer financially. Although she did not explicitly name the Prime Minister, her remarks were clearly aimed at him.
Just a day earlier, on Sunday, September 21, Prime Minister Modi had addressed the nation in a televised speech, hailing the GST rate cuts as a “bachat utsav” (festival of savings) and a pivotal step towards “aatmanirbharta” (economic self-reliance) for Indians.
Meanwhile, on Monday, September 22, several BJP leaders, including West Bengal State BJP president Samik Bhattacharya, visited local markets in the city to engage with shopkeepers and claim credit for the GST reductions.
Ms. Banerjee further pointed out that the Union government had withheld over ₹1.92 lakh crore in Central project allocations for various schemes, including the Mahatma Gandhi National Rural Employment Guarantee Scheme.
“You are diverting our funds, making it challenging for us to sustain critical State-sponsored welfare programs such as Lakshmir Bhandar and Krishak Bandhu. Nevertheless, we are committed to continuing our social welfare initiatives,” Ms. Banerjee affirmed.
Experts note that the West Bengal government’s cash incentive schemes, like Lakshmir Bhandar and Krishak Bandhu, already represent a significant financial strain. The additional ₹20,000 crore loss to the State exchequer is expected to further burden its spending capabilities.
This financial challenge emerges mere months before the 2026 Assembly elections in the state, a period when the Trinamool Congress government typically plans new schemes to garner voter support.
TMC general secretary Abhishek Banerjee echoed his party leader’s sentiments, stating that public pressure had forced the Union government to reduce GST rates. He posted on social media platform X, “BJP4India’s journey with GST has been a festival of exploitation. Higher the numbers of seats they have, higher the taxes. Lower their strength, lower the burden on the people. From 303 to 240 [seats in the Lok Sabha], the message resounds across India: defeat BJP, defeat their GST loot,” sharing a video of Mamata Banerjee’s remarks on the rate cuts.