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West Bengal government’s move to raise value added tax (VAT) on a large number of commodities, which will effectively increase prices of almost all goods, including medicines, has been widely interpreted as a deviation from the state’s populist stance.
With new tax proposals, the state’s tax revenue will rise to Rs 39,783 crore, a 23 per cent rise from Rs 32,405 crore in this financial year. If the projection for the next year is met, it will in fact be a good rise of about 60 per cent over 2011-12, when state’s tax revenue was close to Rs 24,938 crore.
But where is the money going?
A look at what constituted state’s major expenses over the last year points to the fact that populism is still the essence in fund allocation.
Notably, West Bengal will go for Panchayat Elections in May this year — the first litmus test of the Trinamool governments’ popularity since May 2011, when it came to power in the state.
The Budget document shows that in this financial year the state will be spending Rs 3,945 crore for panchayat and rural development, against the actual budgetary projection of Rs 2,716 crore in the 2012-13 Budget document. Thus, the expenses were overshot by more than Rs 1,200 crore or about 45 per cent more than the actual allocation. For 2013-14, Rs 2,990 crore has been kept for panchayat and rural development.
In contrast, for public health engineering, the state will end up spending Rs 256 crore this financial year, against the allocation of Rs 800 crore last year, representing underutilisation of 68 per cent. A windfall gain under the Trinamool regime comes for the information and cultural affairs department, under which actual expenses rose from paltry Rs 6 crore in 2011-12 to Rs 100 crore this financial year, and is expected to further rise to Rs 150 crore in the 2013-14 financial year.
In the minority affairs and madrasah education, the state plans to spend Rs 859 crore in next financial year, against Rs 559 crore this financial year, a rise of 53 per cent.
The allocation for IT sector for the next financial year has been kept at Rs 113 crore. Moreover, against the budgetary expense of Rs 102 crore in 2012-13, the actual spend under the IT department this financial year will be about Rs 69 crore.
In the commerce and industry department too, the state’s planned expenditure was Rs 500 crore in the Budget document of 2012-13, but the state will end up spending Rs 438 crore by the end of this year. The allocation for the department in the next year will only be a marginal increase to Rs 540 crore.
In the land reforms department, the lifeline for industries in any state, against the planned allocation of Rs 75 crore in the last Budget, the state will be spending just Rs 56 crore under the head, this financial year.
What is most interesting in the Budget document this year is the allocation for Woman Development and Social Welfare department. Surprisingly, the allocation for the sector next financial year will come down 10 times over the last year. Last year, the state allocated Rs 1,015 crore under the head, but this year the allocation is merely Rs 100 crore.
West Bengal’s debt is projected to increase to Rs 247,422 crore by the end of the next financial year, against Rs 226,193 crore, according to the revised estimate for 2012-13. The total expense on loan repayment for 2013-14 is Rs 28,318 crore, against Rs 25,195 crore in the revised estimate of 2012-13.
