Mitra braces for budget challenge

According to 2011-12 budget estimate,the revenue deficit of the state government was projected at Rs 8290.83 crore while the fiscal deficit was stated to be hovering around 15,561.38 crore. The state’s revenue receipt was estimated at Rs 65847.91 crore. The total receipt of the state was assumed to be around Rs 30,44,86.51 crore. On the expenditure side,the total revenue expenditure was fixed at 74,138.74 crore. The estimated total expenditure of the state was fixed at 304490.18 crore. The state government had projected a 31 per cent increase in revenue generation. But the revenue generated so far is less than expected,finance department sources said.

Mitra,while holding a press meet at Writers’ Buildings a couple of weeks ago,had lashed out at the Centre for not responding to the state’s repeated demand for a moratorium on interest payment on loan incurred by the previous Left. The state government spends Rs 22,000 crore annually to pay interest of loans and a portion of principal amount. The finance minister,at the instruction of the Chief Minister Mamata Banerjee,met the Union finance minister Pranab Mukherjee quite a few times in the last nine months and briefed him about the grim situation of the state exchequer.

The state government had expected a special bailout package from the Centre to bring West Bengal out of liquidity crisis. But the Centre refused to grant the same because of constitutional obligation. The steady refusal of the Centre to give extraordinary financial package to West Bengal created a rift in the UPA alliance with Trinamool MPs deciding to hit the floor of Parliament during the ongoing budget session demanding special attention towards West Bengal.

The state’s borrowing limit is 20,523 crore. At the beginning of the ongoing financial year,the state government had borrowing limit of Rs 17,827 crore. Because of grim financial situation of the state,the Centre had extended the borrowing limit by Rs 2706 crore a few months back. On January this year,the state government exhausted its borrowing limit after it raised Rs 1000 crore from the open market. In such a situation,Bengal government has been left with no option but to seek more extension of its borrowing limit. But there is uncertainty over whether it would get such a permission from the Centre. The situation is so bad that if the borrowing limit is not extended,fund allocated for development projects will have to be used to pay salaries and pensions.

Chief Minister had repeatedly told the Union Finance Minister that the state government spends 94 per cent of its revenue to pay salaries and pension of its employees. Only four per cent of the state revenue remains left to be used in development projects. In such a situation massive development,which is the electoral promise of the Ma-Mati-Manush government,is impossible if the Centre does not extend enough financial help to the newly elected government. But except funds meant for centrally sponsored schemes,no financial help has come to Bengal after the new government came. The state only received money that it is entitled to get according to what stipulated by the Finance Commission. The state had projected 31 per cent increase in revenue. But it was learnt that the progress made by the state government in generating revenue was not up to the mark till the end of January.