If muddled finances is a consideration, then West Bengal can hardly afford a scuffle with the Centre.
The state is set to breach its Fiscal Responsibility and Budget Management (FRBM) Act limit soon, as it is left to borrow just Rs 1000 crore over the rest of the financial year.
Thus, amidst fractious relation with the Centre, West Bengal will soon have to knock Union Finance Minister Pranab Mukherjee's door for getting a final nod to raise at least Rs 2,706 crore, surpassing the state's borrowing limit.
The FRBM Act was enacted by the Parliament in 2003 to bring in fiscal discipline and the government had notified the FRBM Rules in July 2004. In case of a breach, the government is held accountable under the law and is required to explain to the Parliament the reasons for the breach, corrective steps, as well as the proposals for funding the additional deficit.
"If Congress feels they can go with CPI-M, they can do it. (The) door is open for them. If Congress works with CPI-M, they will not get Trinamool Congress. TMC can go alone,” Banerjee told reporters at the state secretariat on Saturday.
On Friday, West Bengal placed its request with the Reserve Bank of India to raise Rs 800 crore through state development loans. A little more than a fortnight ago the state had raised Rs 1,300 crore through state development loans.The original borrowing limit of the state was Rs 17,828 crore, and the state has raised about Rs 16,828 crore so far.
In August, the Centre committed a Rs 21,614-crore financial package for West Bengal. Of this, the recently-approved Rs 8,750 crore was on account of development of backward region. The money cannot be used for meeting the committed expenditure of state.
The chief minister has been insisting on a package of Rs 19,000 crore for the state, including a moratorium on its huge debt.
In December, for the first time in the last seven months, the state faced an overdraft situation , according to sources close to development.
The state government, however, has been blaming the earlier government for its huge debt burden of Rs 1.92 lakh crore, one of the highest among states.
“The debt Rs 1.92 lakh crore was built up partly because the state government had no restraint on borrowing. The earlier regime was allowed to borrow any amount it wanted — till July 2010. They were borrowing at a massive rate, for whatever political objectives,” Amit Mitra had earlier told Business Standard.
