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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

Kerala court pronounces death sentence for Greeshma in Sharon Raj poisoning case

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Thiruvananthapuram, Jan 20: A local court in Thiruvananthapuram sentenced 24-year-old Greeshma to death by hanging for murdering her lover, Sharon Raj, by poisoning him with a toxic chemical mixed into ayurvedic medicine on October 14, 2022.

While the sentence was being pronounced, Greeshma remained motionless, but Sharon’s parents, present in the courtroom, broke down in tears.

The court remarked that the crime was heinous, and the convict deserved no leniency. Although there were no eyewitnesses in the case, the court praised the police investigation team for conducting a flawless probe.

The court had invited Sharon’s parents to witness the sentencing, highlighting the emotional gravity of the case.

The case also involved Greeshma’s uncle, Nirmal Kumar, who was sentenced to three years in prison. However, Greeshma’s mother, the second accused, was acquitted.

Sharon succumbed to poisoning after battling for life for 11 days, passing away on October 25, 2022.

The tragic relationship between Greeshma and Sharon initially started as a close friendship but deteriorated after Greeshma became engaged to another man.

Evidence presented in court revealed that Greeshma sought to end her relationship with Sharon, motivated by an astrological prediction claiming her first husband would die, allowing her to have a peaceful second marriage.

WhatsApp messages between the two showed Greeshma’s belief in this prediction, which Sharon reportedly attempted to challenge and disproved. Relatives claim Sharon had symbolically married Greeshma at Vettukadu Church and even applied ‘sindoor’ on her forehead.

Sharon’s family accused the Parasala Police of initially attempting to derail the investigation, despite their insistence that the murder was premeditated.

The case took a dramatic turn when Greeshma attempted suicide by consuming disinfectant while in police custody. The attempt, made just before evidence collection, was thwarted by police intervention, saving her life. A separate case was filed against her for this suicide attempt.

During the trial, despite the substantial evidence presented by the police, Greeshma continued to deny any wrongdoing. The case garnered widespread public attention, with many awaiting the verdict as a test of justice in a deeply tragic story.

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National News

SC stays defamation proceedings against Rahul Gandhi for remarks on Amit Shah

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New Delhi, Jan 20: In an interim order passed on Monday, the Supreme Court directed the halting of trial court proceedings in a defamation case filed by a BJP worker against Congress MP Rahul Gandhi over the latter’s alleged defamatory remarks against Union Home Minister Amit Shah.

During one of his public speeches in Jharkhand’s Chaibasa before the 2019 Lok Sabha elections, the senior Congress leader had called Shah a “murder accused”.

A bench headed by Justice Vikram Nath took note of the submission advanced on Rahul Gandhi’s behalf that only an aggrieved person and not a proxy third party can institute a criminal defamation complaint.

Staying the defamation proceedings till further orders, the Bench, also comprising Justice Sandeep Mehta, remarked, “If you are not the person aggrieved, how can you have a proxy filing of complaint?”

“Issue notice to the state of Jharkhand and the complainant. All proceedings in the trial shall remain stayed till further orders,” ordered the apex court.

In February last year, the Jharkhand High Court dismissed Rahul Gandhi’s plea for quashing the criminal defamation case filed by BJP leader Navin Jha.

Gandhi imputed the BJP leadership to be “liars” who are “drunk with power” and BJP workers will accept a person “accused of murder” as the party president but people will never accept the same in the Congress party.

“The people of this country will accept a lying Bharatiya Janata Party (BJP) leadership drunk with power because they know that, what the Bharatiya Janata Party is designed for. [T]hey will, accept a man accused of murder as the President of Bharatiya Janata Party but the people will never accept the same in the Congress Party,” said Rahul Gandhi. The complaint said that Rahul Gandhi’s statement was not only false, rather, it was an insult to all workers, supporters and the leaders who have been working selflessly for the BJP.

In its judgement, a bench of Justice Ambuj Nath of the Jharkhand HC said that the imputation was prima facie defamatory in nature and a prima facie case under sections 499/500 of the Indian Penal Code (IPC) was made out against Rahul Gandhi for imputing the BJP leadership as liars and drunk with power.

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Bollywood

Saif Ali Khan stabbing case: Accused was national-level wrestler in Bangladesh

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Mumbai, Jan 20: Mohammad Shariful Islam Shehzad, the 30-year-old Bangladeshi national arrested for allegedly stabbing actor Saif Ali Khan during a failed robbery attempt, told police that he was a wrestler in Bangladesh before coming to India, sources said.

Shehzad revealed during interrogation that he used to compete in the lower weight category at district-level and national-level wrestling championships in Bangladesh.

His wrestling background, he claimed, enabled him to attack Saif Ali Khan without sustaining any injuries himself, police sources added.

After committing the crime, Shehzad reportedly changed his clothes three to four times to evade detection. He moved across multiple locations, travelling from Bandra to Dadar, Worli, Andheri, and finally to Thane.

On the day after the incident, he returned to Dadar, continuously roaming around, making it difficult for the police to track him down.

Shehzad arrived in Mumbai in September and initially worked at a hotel through a housekeeping company. The contract of the company was also raided as part of the investigation.

Meanwhile, police have transferred Shehzad from Santacruz Police Station to Bandra Police Station for further questioning and investigation. They revealed that Shehzad had scoped out several Bollywood celebrities’ residences before targeting Saif Ali Khan’s house.

He admitted to surveying Saif Ali Khan’s 12-storey building, Satguru Sharan, and Shah Rukh Khan’s Mannat, among other high-profile residences.

Using a ladder to inspect entry points, Shehzad abandoned plans to target Mannat due to its tight security and high walls.

On January 15, Shehzad conducted a detailed recce of Saif Ali Khan’s house and identified an easy entry point. He returned later that night and entered the building at 1:37 a.m. on January 16.

However, his robbery attempt failed, and in a panic, he attacked Saif Ali Khan before fleeing without stealing anything.

Desperate to return to Bangladesh after being unemployed for a month, Shehzad sought financial help but was unable to secure funds. Inspired by an auto driver’s comments about celebrity homes in Bandra, he decided to rob a high-profile residence to finance his return.

Despite a clear opportunity to steal cash and jewellery, Shehzad fled in fear of being caught. He then closely monitored the investigation through news channels, saving screenshots of suspects shown by the media, which were later recovered from his mobile phone.

Mumbai Police initially detained two suspects who resembled Shehzad but continued their hunt. He was eventually arrested on Sunday morning near Hiranandani Estate in Kasarvadavali, Thane, about 35 kilometres from Saif Ali Khan’s residence.

He had been hiding in a labour camp in a forested area and attempted to evade arrest by hiding in bushes but was captured after a seven-hour search operation.

According to DCP Dixit Gedam, Shehzad lacked Indian identification documents, and evidence confirmed his Bangladeshi nationality. Investigators also found that he had been living in Mumbai for four months under the alias Bijoy Das.

Upon his arrest, Shehzad confessed to the crime, saying, “Haan, maine hi kiya hai” (Yes, I did it). He has been remanded to police custody for five days, during which investigators plan to recreate the crime scene at Saif Ali Khan’s residence.

The incident has raised concerns about the security of high-profile residences in Mumbai. Police continue their probe to uncover more details about Shehzad’s activities and background.

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