The cash-strapped West Bengal government is in a quandary over how to get central funds. The state will have to provide more than R17,600 crore as matching grants to get the entire R25,190 crore that the Planning Commission has agreed to give West Bengal.
State planning minister Manish Gupta told FE that around 30% of the R25,190 crore would come as grants from the Centre, for which the state would not have to provide matching grants. But chief minister Mamata Banerjee argued that the state?s financial health would not allow it to provide 70% of the Planning Commission?s granted amount, which works out to around R17,663 crore.
?From where will we get so much money? If the state earns R21,000 crore, it has to spend R20,000 crore on debt services,? Banerjee said. She demanded that the Centre should bear 90% of the cost for implementing the 13 central flagship programmes in the state.
The state has to implement central flagship programmes like MGNREGS, JNNURM, National Rural Health Mission, National Urban Health Mission, Integrated Child Development Scheme, Mid-day Meal, Rashtriya Krishi Vikash Yojana, National Social Assistance Programme, National Rural Drinking Water Project, National Rural Electrification Scheme, Total Sanitation Campaign and others, for which the Centre provides 75%, 65% or 50% of the implementation cost for the year.
But in many cases, the state fails to provide matching grants, for which total funds doesn?t arrive to the state. Of the R22,214 crore granted in 2011-2012, the state was able to utilise R18,629 crore since it could not provide matching grants.
Arun Maira, planning commission member in charge of West Bengal affairs, told FE that the state would need to enhance its partnership with banks so that providing matching grants becomes easier. ?West Bengal does have strained financial condition but it needs to generate enough internal resources to combat a crisis state,? Maira said.
He said West Bengal has delivered well in schemes under the JNNURM and now it would need to focus more on better outcome of the urban services. ?People would be ready to pay more for better services and this would help the state reduce its subsidy burden,? said Maira, adding that the state would need to improve conditions and efficiency of the institutions that implement the Planning Commission projects.
However, state finance minister Amit Mitra is learnt to have already assured the Planning Commission of mopping up the additional 25% revenue. He has presented a plan outlay of R23,371 crore, which includes financial provisioning for implementing the central schemes.
A finance department official said though the state was happy with a 16% growth in allocation, there has been no real growth considering the inflation and rupee depreciation. The rupee has mauled 20% in one year and the headline inflation was last reported at 8.8% in February. So there has been a virtual fall in allocation, the official said.