FRBM Act delay costs Bengal Rs 3,158 cr

Due to the delay in implementation of the Fiscal Responsibility and Budgetary Management (FRBM) Act, the West Bengal exchequer has lost about Rs 3,158 crore relief from 2005-10, a the Comptroller and Auditor General report said on Thursday.

Though the Twelfth Finance Commission had recommended the states to enact the legislation to bring down the fiscal deficit to sustainable levels and revenue deficit to zero by 2008-09, the CPM-led government implemented it only in July 2010.

“Due to delayed enactment of the fiscal responsibility legislation, the state could not avail of total relief of Rs 3157.90 crore during 2005 to 2010 on account of debt relief, relief on interest payment an debt waiver, on outstanding government of India loans,” the CAG report, for the year ending March 31, 2010, said.

The report was tabled in the state assembly by finance minister Amit Mitra on Thursday. The report added that the return on investment received by the government varied between 0 to 0.07 per cent, while it paid interest at the average rate of 8.32 to 9.48 per cent on its borrowings during 2005-10.

“Though the capital expenditure of the state has increased by 82 per cent over the last five years, it accounted for a meager 4.84 per cent of the aggregate expenditure during 2009-10, which was far below the national average of 14.85 per cent by other general category states,” it said.

Training guns on the former government’s handling of public distribution system, the report stated that due to non achievement of the targeta of identification of Antyodaya Anna Yojana (AAY, more than 300,000 families were denied benefit, while 1,93,000 families were deprived of benefit owing to non-issue of ration cards.

It also noted that there was a striking mismatch between assets and liabilities of the state, as only 27 per cent of state liabilities had asset back up at the end of 2009-10.