The government of West Bengal has submitted a demand of Rs 1.14 lakh crore over five years, before the 12th Finance Commission.
Addressing a press conference, state finance minister Asim Dasgupta said, the state government had submitted Rs 88,000 crore before the Eleventh Finance Commission and increased it to Rs 1.14 lakh crore, taking inflation into consideration.Out of the Rs 88,000 crore demand the state government had received Rs 34,000 crore over a five year period.
Dasgupta said, for the central plan loan, interest rate charged from the states was now 10.5 per cent while the central government could borrow funds from the market at a rate of interest of about 6 per cent.
According to him, the government of India was making an unfair gain through this interest rate differential and was creating a specially imposed repayment burden with its multiplier effect on debt for a state like West Bengal.
Dasgupta has proposed that the debt relief which would reduce the net increase payment liability to 25 per cent of the revenue receipts should be provided either by writing off a portion of the debt, consolidation of past loan and significant reduction of the average rate of interest on such loan keeping in view the prevailing rate of interest on market borrowings which was about 6 per cent.
The other measures could be, allowing the states to raise cheaper loans from the market fore retiring the entire quantum or substantial portion of high cost loans or providing grant-in-aid to cover a portion of the interest liability.
Dasgupta said,
