As an interim measure to pay accumulated bills, due since November 2010, the West Bengal government has decided to go for Rs 3,000 crore of market borrowing.
Addressing a press conference on Tuesday, Amit Mitra, finance minister, said accumulated liabilities from November 2010, till March 2011 were Rs 3,500 crore, as no bills were paid from the treasury. The earlier Left Front government had imposed an embargo on such payments, which would be lifted from tomorrow, he said.
“A liability of Rs 3,500 crore has been thrust on the new government,” he said. The government had decided on market borrowing of Rs 3,000 crore and a Rs 500-crore loan from small savings deposits. Mitra also accused the previous Left Front government of gross financial mismanagement, putting the state on the brink of insolvency. “No sovereign government can afford to stop payment of bills,” he said.
Mitra said the state was maintaining a negative treasury balance, including overdrafts, from November 10, 2010, till March 9 this year. As on April, the treasury balance of the state was running a negative Rs 3,291 crore, he said.
Mitra said RBI data showed the state’s revenue deficit during 2010-11 was Rs 16,441 crore, with revenue expenditure at Rs 64,014 crore and receipts at Rs 47,571 crore.
Yesterday, Asim Dasgupta, former finance minister of West Bengal had said the Centre should have extended financial assistance to the state last year itself. In response, Mitra said, “It was not the case.”
For instance, he said, on September 3, 2010, the state had sought a central grant of Rs 2,985 crore. He said the demand was subsequently reduced to Rs 1,345 crore on December 3. The next day, the state intimated the Centre that the need for the grant was over. “Does this show that the state had sought cooperation from the Centre?” he asked.
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On the recent meeting between chief minister Mamata Banerjee and Union finance minister Pranab Mukherjee in which he was present, Mitra said, “Very positive signals have emanated from the meeting.”
A detailed discussion would be held at the secretarial level between the state and the Centre, followed by ministerial talks. Following this, the quantity of assistance for the short, medium and long-term horizons would be determined, he said.