This refers to Vrishti Beniwal’s erudite article “Can the Centre solve states’ debt crises?” (The Beat, June 28). I must congratulate the author for marshalling a lot of facts and figures on the issue of West Bengal’s demand for a moratorium on interest payments. However, I do not agree with the logic that the government cannot take a decision on the issue because it primarily comes under the Finance Commission’s domain. Though the decision on whether or not relief should be given to a state normally falls within the Finance Commission’ jurisdiction, the government has the right to exercise its authority. It can indeed take a call on matters that it delegates to a subordinate body. And the government had rightly done so in the case of Punjab – without the Finance Commission’s recommendation – to help the state combat terrorism. So, the grounds on which the government exercises its jurisdiction are what really matter; it should be seen if they are valid enough for the government to intervene.
The author also puts West Bengal in the same category as Punjab and Kerala because the Finance Commission has clubbed these states together. But one has to keep in mind the Left front’s three-decade rule in West Bengal that left the state with a huge debt burden of Rs 2 lakh crore. Normally, a change in the government is not relevant, but in this case it is. The new government under the Trinamool Congress has inherited a debt-ridden state and is trying to rescue West Bengal from an economic disaster. The situation in Bengal today is as precarious as that of Punjab during the Khalistan uprising. So, West Bengal needs the same kind of assistance from the Centre as Punjab had received between 1995-1996 and 2006-07. When it comes to debt as a percentage of gross state domestic product, it is clear that West Bengal is the worst hit of all the big states and is, in any case, worse off than Punjab and Kerala. So, I cannot agree with the author’s observation that granting moratorium to West Bengal will mean fiscal profligacy on part of the Centre. The justification for granting moratorium on interest is very substantial.
Sukumar Mukhopadhyay New Delhi
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