Cash-strapped West Bengal passes bill in House to hike borrowing capacity

KOLKATA,SEPT. 24:  Burdened with Rs 70,000 crore debt, the West Bengal government on Wednesday passed a bill in the Assembly to enhance its borrowing capacity. The move to amend the West Bengal Fiscal Responsibility and Budget Management Act, 2010, was initiated in the wake of the Centre pausing the release of funds under the MGNREGA scheme. Mamata Banerjee-led government is now desperate to keep the flow of funds in the beneficiaries’ accounts unaffected before the panchayat elections next year.

Earlier, the Union finance ministry had decided to fix the net borrowing ceiling for the state at 3.5 per cent of the Gross State Domestic Product (GSDP) for 2022-23, and an additional borrowing capacity of 0.5 per cent of the GSDP.

“The state is going through acute fund crunch. In recent meetings, the CM has asked bureaucrats to find out ways to generate inflow. The government has no way out other than borrowing more money to keep the welfare schemes alive,” said a bureaucrat.

The Union government had earlier directed the state to recover the money which was allegedly pilfered by the panchayat and zila parishad functionaries, and the state had initiated moves to follow the directive.

Revealing the poor picture of the cash-strapped and industry-starved state, recent statistics released by the Central Industry and Business Ministry show that from January to July, investments worth Rs 1.17 lakh crore came into India, of which West Bengal got only Rs 1,663 crore. The state’s revenue mostly comes from stamps and registration fees, state goods and service tax, sales tax on petrol and state excise.

-TNIE