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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.

National News

241 dead, one survivor as Air India Dreamliner crashes after takeoff from Ahmedabad: Air India

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New Delhi, June 13: In what is being described as one of the worst aviation disasters in Indian history, an Air India Boeing 787-8 Dreamliner carrying 242 people crashed shortly after takeoff from Ahmedabad airport.

The aircraft, operating as Flight AI-171 from Ahmedabad to London Gatwick, plunged into a residential complex near BJ Medical College, killing 241 people on board.

The ill-fated flight had 230 passengers, 10 cabin crew, and two pilots. According to officials, only one person, a British national of Indian origin seated in 11A, survived the crash and is currently undergoing treatment at a local hospital.

The aircraft took off from Sardar Vallabhbhai Patel International Airport at 1.38 p.m. (IST) on Thursday before losing control moments later and crashing into a densely populated area, igniting a massive blaze and triggering emergency response teams across the city.

Air India confirmed the accident in an official statement on X: “UPDATE: Air India confirms that flight AI171, operating from Ahmedabad to London Gatwick on 12 June 2025, was involved in an accident. The 12-year-old Boeing 787-8 aircraft departed from Ahmedabad at 1338 hrs, carrying 230 passengers and 12 crew. The aircraft crashed shortly after take-off. We regret to inform that, of the 242 aboard, there are 241 confirmed fatalities. The sole survivor is being treated in a hospital.”

The airline also shared the nationality breakdown of passengers: 169 Indian nationals, 53 British, seven Portuguese, and one Canadian.

“Air India offers its deepest condolences to the families of the deceased. Our efforts now are focused entirely on the needs of all those affected, their families and loved ones. A team of caregivers from Air India is now in Ahmedabad to provide additional support,” the statement added.

The national carrier has pledged full cooperation with authorities investigating the cause of the crash and has established dedicated helplines for families seeking information.

Domestic callers can reach the support team at 1800 5691 444, while international callers are advised to dial +91 8062779200.

Regular updates will be provided through Air India’s official website and its X handle.

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Plastic nurdle spill from sunken cargo ship reaches TN’s Dhanushkodi sanctuary, raising alarm

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Chennai, June 10: A plastic nurdle spill from the sunken cargo ship MSC ELSA 3 has spread into the newly declared Dhanushkodi Greater Flamingo Sanctuary in Ramanathapuram district, threatening one of India’s most fragile coastal ecosystems.

The MSC ELSA 3, a Liberian-flagged vessel, sank off the Kochi coast a few weeks ago while carrying 640 containers, including 13 with hazardous materials, 12 with calcium carbide, 367 tonnes of furnace oil, and 84 tonnes of diesel.

The ship’s cargo manifest remains undisclosed, fuelling speculation about the full extent of environmental risk.

Dhanushkodi Sanctuary, located within the Gulf of Mannar Biosphere Reserve, supports 128 species of birds — including Greater and Lesser Flamingos — and is home to sea turtles, crustaceans, molluscs, and fish. Its dunes, marshes, and seagrass beds form part of the Central Asian Flyway for migratory birds.

The nurdles — tiny plastic pellets used in industrial manufacturing — resemble fish eggs and can be deadly to marine life. When ingested, they cause internal blockages, starvation, and often death. They also absorb toxins, entering the food chain and posing long-term health hazards.

About 80 bags, each weighing 25 kilograms, have reportedly washed ashore along a 12-km coastal stretch. Affected sites include the Dhanushkodi old church, Irattaithalai, Mugandharayan Chathiram, Gothanda Ramar temple, and Patchappatti village.

Carried by ocean currents from the Thiruvananthapuram-Kanniyakumari coast, the spill now threatens the adjacent Gulf of Mannar Marine National Park, home to vital coral reefs and seagrass beds.

Experts warn these habitats could be smothered by plastic debris, blocking sunlight and disrupting photosynthesis.

Ramanathapuram District Collector Simranjeet Singh Kahlon said, “We’ve identified between 15 and 30 nurdle bags along the coast. A special team has been deployed for cleanup, and additional teams are monitoring for further debris.”

He urged the public not to panic, stating that swift action was underway.

The disaster evokes memories of the 2021 X-Press Pearl incident in Sri Lanka, where 1,680 tonnes of nurdles led to mass marine deaths and crippled fisheries.

Studies showed severe impacts on plankton and larval life forms, threatening entire food chains.

Cleanup efforts in Ramanathapuram face challenges due to the nurdles’ buoyancy and small size, worsened by monsoon waves that break them into microplastics.

With the 61-day annual fishing ban nearing its end, fishermen fear reduced fish catches and consumer hesitancy could harm their livelihoods if the spill worsens.

Environmentalists are calling for urgent intervention, cargo transparency, and long-term containment measures to prevent irreversible damage to one of India’s most critical marine ecosystems.

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Eight Punjab and Haryana HC judges take lead to boost Kashmir tourism post Pahalgam terror attack

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Srinagar, June 9: To give a boost to Kashmir tourism post Pahalgam terror attack, eight judges of the Punjab and Haryana High Court are visiting the valley along with their families.

The visit of the legal personalities along with their families carries a powerful message for the revival of tourism in Kashmir, which got shattered after the Pahalgam terror attack.

On April 22, Pakistan-backed terrorists of Lashkar-e-Kashmir (LeT) killed 26 civilians, including 25 tourists and a local pony owner.

The pony owner sacrificed his life while trying to protect the tourists from the bullets of the terrorists.

The terror attack caused outrage in the entire country, and to avenge the killings of innocent civilians, the Indian Armed Forces carried out airstrikes against terror infrastructure in Pakistan under Operation Sindoor.

In retaliation for India’s attack on terrorist infrastructure, Pakistan resorted to heavy mortar shelling on civilian facilities in Poonch, Rajouri, Baramulla, Kupwara and Bandipora districts.

Eighteen civilians were killed in Pakistan shelling, 13 of them in Poonch district, in addition to the destruction of scores of homes, shops, a temple, a mosque, a church and a Gurudwara.

The itinerary of the visiting high court judges includes visits to the Mughal Gardens of Nishat and Shalimar, Shikara rides on the Dal Lake, a visit to the historic Pari Mahal and buying a few handicrafts at the local market.

There could be no better omen for the revival of tourism in Kashmir than the decision of the honourable justices of the High Court to come here along with their families.

Coinciding with the visit of these dignitaries, local tour and travel operators and hotel owners are reporting a gradual rise in the tourist bookings that had virtually stopped after the Pahalgam terror attack.

Tour and travel operators and others connected with the tourist industry have expressed hope that the visit by the most respected legal dignitaries, like the high court judges, will restore confidence among visitors, both domestic and foreign, that Kashmir is a safe tourist destination.

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