West Bengal may have been struggling to shrug off its debt for more than three decades, but if the Mamata Banerjee-led Trinamool Congress comes to power, the formula for turnaround would be wrapped in a ‘vision document’.
The document, which will be presented to the central government, RBI and the Planning Commission, would contain a package for reviving the state’s finances. It would need the blessings of Union Finance Minister Pranab Mukherjee to sail through.
According to data from the Reserve Bank of India (RBI), West Bengal is the third-highest indebted state, after Maharashtra and Uttar Pradesh, as its accumulated debt burden stood at Rs 1,86,000 crore for 2010-11.
“I am expecting Mamata Banerjee will present a vision document to bring the state’s finances into a responsible trajectory. The document will be presented to the central government, RBI and the Planning Commission. This is how states like Bihar and Assam have turned around,” said Mitra.
The document would also contain a package, expected to reduce the huge debt burden of the state, he said.
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Bihar emerged as the fastest growing state during 2008-09, clocking a growth rate of 11.44 per cent, according to data from the Central Statistical Organisation. Between 1999 and 2008, the state’s gross domestic product grew by 5.1 per cent a year, which was below the national average of 7.3 per cent. During the first five years beginning 1999-2000, the state’s economy had grown by 3.50 per cent.
Between 2001-02 and 2008-09, West Bengal’s economy grew by 6.61 per cent.
Mitra, seen as the state’s finance minister-in-waiting, had contested elections from the Khardah constituency in North 24 Parganas district, the stronghold of Left leader Asim Dasgupta, the present finanace minister.
Over the last 34 years of Left rule, the state has been vocal about the Centre’s “deprivation” towards the economic development of the state.
Dogged by high revenue and fiscal deficits, high committed expenditure and high debt compared to revenue receipts, West Bengal is nearing a debt trap. As much as 85 per cent of the state’s revenue receipts have to be spent on committed expenditure such as salaries, interest payments and subsidies, leaving little room for expenditure on development projects.
“A vision document is what RBI, the Planning Commission and the central government wants from all states. The CPI(M) government did not present it for all these years. That is the reason that every month they are borrowing from the Centre,” said Mitra.
West Bengal has also been demanding not to treat small savings as internal debt, which amounts to about Rs 79,000 crore of the Rs 1,85,000 crore accumulated debt of the state.