She may stamp her foot and shout at the media when quizzed on the Bengal economy. She may threaten the Prime Minister and the UPA government with pulling out if there?s another petrol price hike. But the dramatics won?t wish away the problems Bengal CM Mamata Banerjee faces within the state.
With very little to say on the state of the economy?and no, the Centre cannot be blamed for every Bengal failing?her key ministers are ducking behind the November bypoll code of conduct excuse to thwart questions on important issues like industry, power, jobs, land and, of course, the state?s financial health. On top of this, there appears to be a huge lack of understanding about the economics of running a state. Or else, why would she be so adamant against a power tariff hike when that would ensure that state-run power utilities would not be in the red? Why would she be against imposing a simple water tax that would sustain the growth of civic bodies, and thus, help the people? Why would her party MPs protest so loudly at a petrol price hike which enhances the sales tax kitty as well?
After the recent R1.80 hike of petrol?the fuel costs R73.15 a litre in the state now?R15.13 is going into the state sales tax box for every litre sold. On average, dealers say about two crore litres of petrol are sold every month in the state, and that the state government will collect about R30 crore from this sale. Mamata hasn?t talked about reducing the sales tax to reduce the burden on the people. When LPG prices were hiked a few months ago, the CM said the state would carry the burden of the hike?R75 crore?but wouldn?t let it be passed on to the people despite the government being severely short on cash.
Soon after she came to power and sought help from the Centre, often harping on the point that the Trinamool Congress was one of UPA?s biggest allies with 18 MPs, the Centre drew up a grant-in-aid of R9,800 crore. With the state sitting on a debt pile of R2 lakh crore, plus interest and salary payouts comprising a high 74% of revenue receipts, Mamata has been putting pressure on the Centre to help Bengal out. True, the bailout package is yet to arrive, but then even Mamata has managed to do little to generate revenues in the six months she has been in power.
In Kolkata last week, the CM is believed to have drawn Pranab Mukherjee?s attention to a waiver of interest payouts for at least six months or so. Under the Debt Consolidation and Relief Fund, Bengal can seek some relief on interest payouts because it has enacted the Fiscal Responsibility and Budgetary Management Act, though rather late. With the state government doing precious little to draw up a roadmap for financial recovery, there are apprehensions that the treasury is in urgent need of funds and has barely enough to run till February next year. Even as it waits for the special area package, the state government is miffed that even the permission to raise the borrowing ceiling from R17,800 crore to R20,174 crore for 2011-12 is yet to be given by the Centre. There is very little room to manoeuvre because the state has already borrowed R15,173 crore, and can only raise R2,627 crore from the market unless the ceiling is raised.
Even as the state tries to sort out the financial mess, industry is perturbed at the lack of clarity on policy initiatives. Even as the Singur case is in court, the state government?s stance that it won?t help big investors to get land hasn?t gone down well with industry. At two meetings with industry, in June and in October, industry chiefs tried to convince Mamata that the land issue has to be sorted out if she wants to attract big investments to Bengal. Industry officials can?t recall any new investments to the state in the last six months?and industry insiders say at least 200-odd projects of various sizes have been put on hold for several reasons, from land clearances issues to faulty papers. In fact, Mamata?s stand to take back Tata Motors? land, though politically clever, has created huge doubts among industrial circles. Already, many of the industrial houses present in Bengal are expanding outside the state. At the glittering film festival opening in Kolkata last week, Shah Rukh Khan agreed to be brand ambassador for Bengal, saying he would arrive in the city at 48-hour notice should Mamata didi require any assistance. At the rate Bengal is progressing, there will hardly be a brand left to represent.