To climb out of fiscal hole, Bengal govt looks at helping hand, not its nationality

For his government, it seems, whether foreign experts can or cannot be in the Planning Commission is a matter best left to op-ed pages and TV studios in New Delhi.

Says the state government’s project document: “The international consultants will include a public finance specialist as team leader.” It will be this international expert’s job to take overall responsibility for the project and to make sure that the proposals are consistent with the government’s own goals.

The $1-million Technical Assistance (TA) project is being financed in part by Britain’s Department for International Development (DFID) and partly by the Asian Development bank (ADB). And if the remedy looks novel, even radical, it is because officials acknowledge that the state quickly needs to climb out of a hole.

The fiscal deficit, for example, rose from 4.3 per cent of the state’s GDP in 1995 to 9.1 per cent in 1999, the report notes. “Around 43 per cent of expenditure is now financed by fresh borrowings which are added each year to the stock of debt,” it adds. “Rationalising and monitoring expenditures were not a priority in the past,” it says. “The need (for this) is now recognized.”

“The state government is examining the TA project report,” state chief secretary A K Gupta said. No aspect of the state’s finances will escape the examination. The experts will also review government salaries and suggest how PSUs and pensions cane be reformed. “They will cover the entire theme of financial and economic governance,” said Ghosh.

The state is waiting for is a green signal from the Centre. The chief secretary will chair the steering committee to monitor the project.