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How West Bengal put brakes on growing fiscal deficit

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With only a few days to go before the state budget, it would be interesting to watch how state financial advisor Amit Mitra put brakes on the growing fiscal deficit in the state.

Experts are of the opinion that the state financial condition was showing signs of recovery despite the outstanding liabilities but the financial burden caused by the social schemes announced by the state is having a negative impact on the financial health of the state.

The revenue deficit has been pegged at Rs 26,755.25 crore which is more than three per cent of the Gross State Domestic Product (GSDP) limit. Going by the past trend, the figure is likely to increase further. The fiscal deficit shot up from Rs 52,350.01 crore in 2020-21 to Rs 60,863.96 crore in 2021-22. The upswing in deficit is expected, considering that both the state’s tax and non-tax revenues have plummeted during the pandemic.

The state’s own tax revenue dropped from Rs 60,669.37 crore in 2019-20 to Rs 59,886.59 crore in 2020-21 and its share in central taxes plunged from Rs 48,048.40 crore to Rs 44,737.01 crore during the same period. The period also witnessed a fall in non-tax revenue from Rs 3,212.90 crore to Rs 2,466.31 crore.

Given the pandemic-induced fall, the budget estimate of Rs 50,070.29 crore as state’s share in central taxes, Rs 75,415.74 crore as its own tax revenue and Rs 4,611.72 as its non-tax revenue, appear unrealistic, which means the current fiscal may end with a higher revenue deficit as well as an increased fiscal deficit.

With an estimated fiscal deficit of 4.03 per cent of its GSDP, West Bengal is among those few states that have crossed the three per cent threshold limit. In 2020-21, the percentage was 3.86 as against 2.94 per cent in 2019-20. Not only that, the GSDP growth rate at 2011-12 constant prices went up from 4.17 per cent in 2012-13 to 6.13 per cent in 2015-16, 7.2 per cent in 2016-17, and 6.41 per cent in 2018-19 but again plunged to 5.6 per cent in 20-21. However, it still consistently remained below the national average.

Interestingly enough, Bengal’s debt-GSDP ratio stood at its peak in 2010-11 at 41.9 per cent, according to a NITI Aayog-sponsored survey conducted by IIM Calcutta. This was the highest in the country. Since then, the ratio has gradually come down and stood at 34.75 per cent in 2018-19 but in the 2020-21 financial year it again shot upto 38.8 per cent indicating the pressure on the economy of the state.

A comparative study shows that the states with the highest debt-GSDP ratio in FY22 are Punjab (53.3 per cent), Rajasthan (39.8 per cent), West Bengal (38.8 per cent), Kerala (38.3 per cent) and Andhra Pradesh (37.6 per cent). All these states receive revenue deficit grants from the Centre.

Former chief economic advisor to the central government and BJP MLA Ashoke Lahiri said: “What is worrying us more is a constant increase in the primary deficit (fiscal deficit minus interest payment). Figures from RBI show that GSDP to primary deficit was 0.4 per cent in 2019-20. In a year that shot up to 1.4 per cent and in 2021-22 that is 1.9 per cent. This points to the fact that even if the interest burden is removed, the state continues to borrow more”.

The precarious financial condition of the state was evident from the sudden increase in market borrowing. The market borrowing of West Bengal so far in the fiscal year 2022 is 20 per cent higher on a year-on-year basis, according to a report by the CARE Ratings. Only Nagaland, up by 71 per cent, had a higher borrowing during the period than West Bengal.

Haryana (by 11 per cent), Sikkim (by 7 per cent), Jammu and Kashmir and Maharashtra (by 4 per cent each) and Rajasthan (by 3 per cent) are the few other states that have higher borrowings so far in the current fiscal than the comparable period of a year ago. In the case of other remaining states, it is lower than last year.

According to the statement issued by the Reserve Bank of India, the state is likely to borrow 12 times raising around Rs 20,000 crore from the market between the period of January 1 and March 31 making it obvious that the state government is struggling hard to negotiate the expenses caused by the social schemes launched by Chief Minister Mamata Banerjee.

Interestingly enough, in the period between April 2020 and December 2020 when the state revenue plummeted to all time low because of the pandemic situation and the consequent lockdown, the state raised around Rs 35,000 crore from the market but during the current financial year between April 2021 to December 2021, it went for a market borrowing of Rs 52,500 crore. During the same period in 2019, the state borrowed Rs 28,000 crore via State Development Loan.

Incidentally, when the 34-year rule of the Left Front came to an end in 2011 and Mamata Banerjee became the chief minister, the accumulated debt of the state was Rs 1.93 lakh crore. But, according to the state government’s budget figures, the accumulated debt is likely to go upto Rs 5.5 lakh crore by the end of the 2020-21 financial year.

The state government’s dying effort to negotiate the huge cost of non-planned expenditure came to the fore when recently chief minister Mamata Banerjee directed all the departments to cut down on unnecessary expenditure beyond the approved budget and not to take any new project without the approval of the state Chief Secretary or the finance department. The announcement was an obvious indication that the government is trying to negotiate the financial burden caused by the non-planned expenditure of the dole politics announced by the chief minister Mamata Banerjee before the election.

After coming to power for the third time- Chief Minister Mamata Banerjee announced two major schemes – ‘Lakshmir Bhandar’ and ‘Swastha Sathi’ for all – the schemes that demand a huge financial involvement. ‘Lakhmir Bhandar’ is a project where the state is supposed to give Rs 1,000 to the women belonging to SC/ST/OBC and Rs 500 to the women belonging to General caste. The government has allocated a budget of approximately budget of Rs 12,900 crore for around 1.8 crore women who have so far registered themselves for the scheme.

Initially the government had an estimate that nearly 2 crore beneficiaries will register for ‘Lakshmir Bhandar’ project but so far, the government has received an application of 1.63 crore of which 1.52 crore has been approved. Nearly 7 lakh applications have been cancelled. The government has spent more than Rs 800 crore for the project and going by the figure the finance department estimates that the state government will have to cough up another Rs 5,600 crore which might in turn lead to a staggering figure in a full financial year.

Countering the Centre’s Ayushman Bharat, the state launched its own scheme – ‘Sasthya Sathi Prokolpo’ where some citizens of the state were given an annual health coverage of five lakh rupees. After coming to power in 2021, the chief minister opened ‘Swastha Sathi’ for all the citizens of the state leading to a quantum leap in the expenditure. Even a year back when the estimated budget for this project was around Rs 925 crore, this year the allocation touched an astronomical figure of Rs 2,000 crore annually.

According to experts, with the decline of the revenue generation, multiple market borrowings have now become the essential compulsion of the West Bengal government now to meet its recurring expenses.

They are of the opinion that the state is struggling with the non-plan expenditure mostly to meet the promises made by Chief Minister Mamata Banerjee during her election campaign.

Crime

RG Kar rape victim’s parents dismiss NCRB report calling Kolkata ‘safest city’

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Kolkata, Oct 4: The parents of the R.G. Kar Medical College and Hospital, on Saturday, have refuted the latest report of the National Crime Records Bureau (NCRB) published, where Kolkata has been termed as the safest city across the country.

As per the NCRB report, Kolkata for 2023 (latest available) has recorded the lowest cognisable offences per lakh people, which is the fourth time in a row.

On Saturday, while speaking to the media persons, the parents of the R.G. Kar victim rubbished this part of the NCRB report, and claimed that these findings were not based on proper field research and probably the report was prepared to please anyone.

“Was my daughter secured, and that too at her workplace? Was the senior citizen at Kultali in South 24 Parganas district, who became a victim of gang-rape this week, safe? No one is secure here. I do not know who prepared the report. It seems that the report was prepared while sitting in the comfort of the office and without any proper field-based research,” the victim’s mother said.

The victim’s father expressed doubts over the credibility of those in the NCRB who have prepared the report.

“I do not know who in NCRB is responsible for preparing such reports. Even if I believe that the report of Kolkata being the safest city in the country, does that not mean the safety aspect in other Indian cities is unimaginable? I doubt that the NCRB had been misled, and hence the outcome was such a report,” the victim’s father said.

According to him, the only possibility is that the police personnel in Kolkata do not register most of the complaints filed by common people, and hence the crime figures in the city are projected as low.

“We can realise what the reality is since our daughter left. Probably, the experiences are the same,” he added.

As per the latest report of NCRB, Kolkata recorded 83.9 cognisable offences per lakh people in 2023, the lowest among the 19 cities.

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Shiv Sena (UBT) Chief Uddhav Thackeray Slams BJP For Vitiating Harmony; Calls Devendra Fadnavis ‘Helpless’ CM Amid Corruption, Farmer Distress

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Pune, Oct 4: Shiv Sena (UBT) leader Uddhav Thackeray on Saturday dubbed Devendra Fadnavis a “helpless” chief minister who has failed to crack down on “rampant corruption” under his watch.

Citing the announcement of various welfare schemes in poll-bound Bihar, he appealed to the Centre to extend financial assistance to women in Maharashtra.

Thackeray addressed gatherings of women and Sena (UBT) workers in Pune. He also interacted with the media.

Addressing an interaction organised by the Pune Union of Working Journalists, Thackeray said the Sena (UBT) did not need a certificate on Hindutva from the Bharatiya Janata Party, which was “creating walls within the country.”

“India is a beautiful country. It has a great culture. However, these people (BJP) have vitiated the entire atmosphere and made it hell. These people have created walls within the country. I have been working hard to prevent further deterioration.

“I have said time and again that the BJP cannot run governments in the state or at the Centre. The Narendra Modi government has failed to address issues in Kashmir and Manipur,” the former Maharashtra chief minister alleged..

The BJP is taking the country on the path of dictatorship, Thackeray added. Attacking Fadnavis, he said, “I don’t consider anybody as an enemy, not even the prime minister. But considering the state’s current situation, the chief minister looks ‘hatbal’ (helpless) despite (BJP-led Mahayuti) having a brute majority. Despite several instances of corruption, the CM is helpless to act against corrupt individuals,” he claimed.

Thackeray alleged the Fadnavis government had failed to help farmers, hit by heavy rains and floods..

Responding to criticism that he had abandoned the Hindutva fold (after his alliance with the Congress and NCP (SP) in 2019), the Shiv Sena (UBT) leader claimed it was the BJP that had started ‘Saugat-e Modi’ campaign to appease Muslims.

“I do not require any certificate on Hindutva from the BJP. My grandfather (Prabhodankar Thackeray) was a well-known reformer. Our Hindutva has been progressive,” he said.

Thackeray also slammed Defence Minister Rajnath Singh for “big talks” against Pakistan.

Singh on Friday asserted that the NDA government has demonstrated, through the 2016 surgical strike, 2019 Balakot airstrike, and the recent Operation Sindoor, that the country can cross any border whenever necessary to protect citizens and safeguard India’s unity and integrity.

Addressing a gathering of women, Thackeray stated that the state government provided financial assistance to women for two to three months during elections, just to win votes.

“This is cheating. Ladki Bahins desperately need financial help. I hope PM Modi will announce some aid during his upcoming visit to Maharashtra”, he added.

Thackeray said the (Central) government acted promptly when Bihar needed financial help. “If you are providing assistance, do not restrict it to Bihar; extend it to all women in the country. These women are not paid voters,” he added.

Addressing Sena (UBT) workers, Thackeray called for expanding the party network by setting up “shakhas” or branch offices.

Without naming Deputy Chief Minister Eknath Shinde, he said the attempt to break the Shiv Sena will never succeed. He said the Sena (UBT) can win the upcoming elections to local bodies in Maharashtra, provided it works hard.

“Vote theft is the result of illegal voting. Why can’t we do the same thing that Rahul Gandhi ji has done? Find bogus voters. We won the Lok Sabha polls, but lost assembly polls, which were held shortly,” he told the party workers..

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Mumbai: BMC Chief Bhushan Gagrani Inspects Goregaon-Mulund Link Road & Coastal Road (North) Projects, Orders To Expedite Work

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Mumbai: Brihanmumbai Municipal Corporation (BMC) Commissioner and Administrator Bhushan Gagrani, on Saturday, inspected key infrastructure projects in Mumbai, including the twin tunnel site at Dadasaheb Phalke Chitranagari in Goregaon under Phase 3(B) of the Goregaon-Mulund Link Road (GMLR) project and the Versova–Bhayander stretch of the Mumbai Coastal Road (North).

During the visit, Gagrani reviewed project layouts, interacted with engineers and issued firm directives to speed up the work. He stressed that all necessary permissions and no-objection certificates (NOCs) for the Coastal Road (North) project must be secured without delay and instructed officials to fast-track land acquisition for areas affected by the alignment.

Deputy Commissioner (Infrastructure) Shashank Bhore, Chief Engineer (Bridges) Uttam Shrote, P North Ward Assistant Commissioner Kundan Valvi, along with other senior officials and project consultants, accompanied him on the inspection.

The BMC chief’s visit also highlighted progress on the six-lane flyover between Dindoshi Court and Dadasaheb Phalke Chitranagari, a crucial part of Phase 3(A) of the GMLR project. Out of 31 planned piers, 27 have already been completed, with work on the remaining four currently underway near Ratnagiri Junction. The flyover, stretching 1,265 meters, is being built using box girders and reinforced concrete and will also feature a pedestrian bridge equipped with escalators.

According to the project timeline, girder launching, deck slab casting, and approach road construction will begin soon. The approach road at Dindoshi Court is expected to be finished by January 31, 2026, while the one at Dadasaheb Phalke Chitranagari will be completed by April 30, 2026. The flyover is targeted to open for traffic by May 16, 2026. Additional Municipal Commissioner (Projects) Abhijeet Bangar also reviewed the project’s progress at the BMC headquarters on Friday.

A senior BMC bridge department official said that of the 26 spans, 12 have been completed, with the remaining 14 scheduled for completion by February 15, 2026. While construction is progressing steadily on most parts, some work on the Mulund side is facing delays due to rehabilitation and land acquisition challenges. Once resolved, the pending flyover work will resume.

The Rs 14,000-crore GMLR project, spanning 12.2 km, will link the Western Express Highway at Goregaon with the Eastern Express Highway at Mulund, slashing travel time between the suburbs from 75 minutes to just 25. Once completed, it promises to deliver seamless east-west connectivity across Mumbai, easing congestion and commuter woes.

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