West Bengal facing debt trap?
The Mamata Banerjee government during its first 10 months in the office has made West Bengal a more debt-stressed state. The state’s total outstanding liabilities as on March 31, 2012, would stand at `2,08,382.58 crore compared to `1,87,387.40 crore as on March 31, 2011. Moreover, according to the budget estimates, this figure would further increase to `2,26,550.87 crore at the end of 2012-13.
According to the Budget Publication No. 6 of the West Bengal government, in between April 1, 2011 and March 31, 2012, the state government’s net market borrowing would stand at `20,835.97 crore which is a record in the history of West Bengal.
In its vision document before the last Assembly elections in the state, the Trinamul Congress had promised to turnaround the state’s fiscal position. “We will have to raise additional resources as well as compress and minimise the wasteful expenditure that has become the hallmark of CPI(M) government,” the party had claimed in its vision document. However, according to the budget publications as released by the state government, the fiscal health of West Bengal had deteriorated further ever since the new government assumed office in May 2011. According to the revised estimate of the state government for 2011-12, the total market borrowing for this fiscal stood at `22,423 crore compared to `15,390.65 crore as estimated in the budget of 2011-12. Of `22,423 crore, the previous Left Front government had borrowed `5,173 crore in April-May. Hence, the Mamata Banerjee government since assuming the office has borrowed `17,250 crore which is also a record. According to the 2012-13 budget estimates, the West Bengal government would borrow `20,071.40 crore from the market in the next fiscal.
In 2011-12 budget, the state government had estimated to collect `27,690 crore as the state’s own tax revenue, but the actual collection would stand at `24,937.04 crore as on March 31, 2012. Similarly, the state’s own non-tax revenue collection is also less compared to the budgetary estimates. In addition, the state’s share of Union taxes and duties would stand at `18,587.81 crore as on March 31, 2012 for the whole fiscal as compared to the budgetary estimates of `19,166.86 crore.
On being asked the reasons for the increase in the market borrowing compared to the original target, a senior finance department official said: “Due to the announcements of new jobs and schemes without any budgetary provision since May 2011, the expenditure has increased. The market borrowing has increased to meet this gap of revenue and expenditure. In the next fiscal, the market borrowing may be higher compared to the estimated figure if the revenue collection does not improve significantly.”
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