Cash-starved Bengal government will borrow heavily to meet day-to-day expenses

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Cash-starved, Mamata Banerjee’s government is likely to borrow heavily in the coming months to meet day-to-day expenses, according to government sources.

Although no senior official or minister said a word about the government’s plans to deal with increased spending due to payments for the 100-day work programme, arrears of high cost allowances and other Inside programs sources said it was expected to borrow around Rs 20,500 crore from the market in the final months of this calendar year.

According to sources, the government is likely to borrow Rs 4,500 crore in October. The amount would rise to Rs 7,000 crore in November and then to Rs 9,000 crore in December. This could bring the total loan to Rs 5 lakh 86,000 crore.

The state government had planned a total borrowing of Rs 73,268 crore for 2022-2023. The previous Marxist government had left a total loan of Rs 1.72 lakh crore during its three decades of rule.

The opposition BJP and Left blamed the chief minister for gradually driving Bengal into a debt trap. “She led a Khela-Mela regime highlighted by dolls, grants and fairs to gain narrow political mileage…in the process she pushed the common man into the trap of debt,” Sujan said Chakrabarty, a member of the central committee of the CPI (M).

The opposition BJP showed how the chief minister had “thoughtlessly spent money on unproductive schemes like a grant of Rs 60,000 each to 43,000 clubs organizing Durga Puja across Bengal…this has resulted in a wasteful expenditure of 252 crore rupees”.

“The Chief Minister was solely responsible for ousting Captain of Industry Tatas from Bengal…after that no industry worth its salt invested here in a big way, although it spent millions of dollars in the beginning to organize the Bengal Global Business Summit, a mega event to attract investment,” said Samik Lahiri, former CPI(M) MP.

“While she failed to comply with the High Court’s order to clear DA from government employees… while she failed to clear MNREGA workers’ dues… she thoughtlessly spent on allowances for winning votes…but this cannot go on forever…she will have to face the consequences,” said BJP State Chairman Dr. Sukanta Majumdar.

Even the CAG has expressed concern about the growing gap between the state’s gross domestic product and total borrowing. While in 2018-2019 the state loan accounted for 35.68% of GSDP, in 2020-21 it rose to around 37.05%, the authorities pointed out. The CAG also showed how in 2020-21 the government spent 71.53% of its acquired loan to repay past debts.

The TMC government has repeatedly blamed the Center for the current financial crisis facing the state. The Chief Minister recently told a public meeting how the Center withheld about Rs 1 lakh crore which belonged to the state. She also alleged that the Center was not clearing Rs 4,000 crore for the MNREGA scheme.

The Chief Minister, in a recent letter written to Prime Minister Narendra Modi, explained how the Center was blocking legitimate subsidies from Bengal. She wrote in May this year “You know that MGNREGA salaries form an important part of the livelihood of rural people and in view of this importance, the law stipulates that salaries must be paid within a fortnight”, adding the payment of MNREGA wages in Bengal was due in the amount of Rs 6,500 crore… i.e. Rs 3,000 crore against wage debts and Rs 3,500 crore against non-wage debts.

However, Bengal BJP leader Dilip Ghosh said the Center had done the right thing by stopping the payment as most of the funds sent to the state were either diverted for political purposes or taken away by TMC politicians. “The Center has demanded accountability… Until the state submits the documents, how can the Center release the funds… it’s public money,” he said.

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