Bengal to borrow Rs 2,000 cr from market again

With the possibility of the Union government giving a financial aid to cash-strapped West Bengal diminishing after the Trinamool Congress walked out of the UPA II,the state government has decided to borrow Rs 2,000 crore from the market again to pay the salaries,pension and retirement benefits to its employees.

Written by Express News Service | Kolkata | Published: October 16, 2012 3:16 am

With the possibility of the Union government giving a financial aid to cash-strapped West Bengal diminishing after the Trinamool Congress walked out of the UPA II,the state government has decided to borrow Rs 2,000 crore from the market again to pay the salaries,pension and retirement benefits to its employees.

Finance department officials said the state government,whose annual market borrowing limit is Rs 22,821crore,will borrow Rs 2,000 crore from the market on Tuesday for which the Reserve Bank of India has already issued the notification. West Bengal is among the six states that will be borrowing money from the market on Tuesday. Other states that will borrow are Tamil Nadu,Karnataka,Maharashtra,Uttar Pradesh — each will borrow Rs 1,000 crore — and Arunachal Pradesh,which will raise Rs 50 crore from the market.

This is the second time in 30 days,the West Bengal government is raising money from the market to pay salaries for its employees. On September 18,the government had borrowed Rs 1,500 crore from the market. Once the state borrows another Rs 2,000 crore,the total market borrowing of West Bengal government will be Rs 12,000 crore.

In March this year,Union Finance Ministry,then headed by Pranab Mukherjee,had increased West Bengal’s market borrowing limit by Rs 950 crore. With this the state can raise a maximum of Rs 22,821 crore from the market in the current fiscal year in accordance with the Fiscal Responsibility and Budget Management Act (2003).

In the past seven months,the state has already borrowed 12,000 crore,including the latest Rs 2,000 crore. So in the remaining period of the current fiscal year,the state government can borrow Rs 10,821crore.

Till March this year,West Bengal had a total debt burden of Rs 2,08,382 crore. If the state exhaust its entire market borrowing (Rs 22,821 crore),the net debt burden of the state government will be Rs 2,31,203 crore.

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