Finance minister Pranab Mukherjee has asked West Bengal finance minister Amit Mitra to first present a regular budget and then seek a financial package from the Centre.
A Union finance ministry official told FE that a R19,000-crore package was not feasible and it was likely to be pared to around R5,000 crore. According to a source, ?The principle is, first exhaust all your own means to generate revenue and then ask the Centre to give you assistance.? Bihar?s R4,500-crore special area package was worked out on this principle, the source added.
The Mamata Banerjee government has turned down suggestions to levy water tax and increase power tariff. This would have guaranteed it a sum of R860 crore. Water tax from the Kolkata Municipal Corporation area alone would have fetched the state government R360 crore. The West Bengal CM has also announced a host of populist measures, including R2 per kg rice for Junglemahal without provisioning.
West Bengal FM Amit Mitra is shuttling between Delhi and Kolkata to hold discussions with Pranab Mukherjee and then to report to the CM. Mitra who went to Delhi on Monday evening was supposed to meet Mukherjee on Tuesday and Wednesday. But on Wednesday afternoon he returned to Kolkata. Mitra once again left for Delhi on Thursday to meet Mukherjee. According to state finance department officials, Mukherjee explained the methodology of getting funds and told Mitra that the state needs to follow procedures. Mitra, on Wednesday, asked officials to work on the budget and set August last week as the deadline.
Earlier, the finance department had informed the governor and the assembly that it would place another vote-on-account for the period September to March. But Mukherjee made clear that unless the provisioning for various expenditures are shown, the Centre as a matter of rule, could not earmark any assistance. FM has also asked Mitra to stop paying bills, unless provisions were made. The government, after clearing the R3,000 crore contractors? bill by raising money from the market, has been paying bills without actually making any provisions for it.
The finance department has now directed the treasury to stop releasing funds towards emergency and contractors? bills till the budget was placed. The government may now allow state-run power utilities to apply for tariff revision.
State power minister Manish Gupta said his department would revive the financial health of all power utilities and may allow power companies to go for a tariff hike. ?There is a state regulator to determine power prices…But we will be careful that the poor are not affected.?
Finance department officials said that water tax might also come back since without that the state would not get JNNURM funds.