 "Tax-free Budget in West Bengal")
West Bengal Finance Minister Amit Mitra presented another tax-free Budget on Friday even as the redemption of market loans is set to peak at the beginning of the next financial year, further constraining the state’s weak finances.
Vociferous about the negative impact of demonetisation, Mitra offered his bit by providing value-added tax (VAT) relief to small businesses and doling out Rs 50,000 each to about 50,000 skilled workers who have returned to West Bengal from other states after being left jobless due to the note ban. The state’s plan outlay will increase by around 12 per cent for 2017-18 at Rs 64,733 crore.
Financial disarray in West Bengal can be assessed from the fact that in 2017-18 nearly 80 per cent of state’s tax revenues, pegged at around Rs 55,787 crore, will go towards the loan repayment bill, which is around Rs 45,340 crore (against Rs 36,638 crore in 2016-17).
However, West Bengal Chief Minister Mamata Banerjee brushed aside claims that the state was in a debt trap.
“We are not in a debt trap. We are rising from it. There was no stable government at the Centre since the death of Rajiv Gandhi. Thus, the state kept on borrowing from the market, and after 10 years, we have to repay that,” said Banerjee.
Vociferous about the negative impact of demonetisation, Mitra offered his bit by providing value-added tax (VAT) relief to small businesses and doling out Rs 50,000 each to about 50,000 skilled workers who have returned to West Bengal from other states after being left jobless due to the note ban. The state’s plan outlay will increase by around 12 per cent for 2017-18 at Rs 64,733 crore.
Financial disarray in West Bengal can be assessed from the fact that in 2017-18 nearly 80 per cent of state’s tax revenues, pegged at around Rs 55,787 crore, will go towards the loan repayment bill, which is around Rs 45,340 crore (against Rs 36,638 crore in 2016-17).
However, West Bengal Chief Minister Mamata Banerjee brushed aside claims that the state was in a debt trap.
“We are not in a debt trap. We are rising from it. There was no stable government at the Centre since the death of Rajiv Gandhi. Thus, the state kept on borrowing from the market, and after 10 years, we have to repay that,” said Banerjee.
Notably, RBI, in its report in state of finances in 2015-16, had mentioned that the increase in market borrowings of state governments since 2008-09 entailed large repayment obligations from 2017-18 onwards. Other states which could face similar a debt burden Maharashtra, Tamil Nadu and Uttar Pradesh. Starting 2007, states have been borrowing heavily from the market.
According to the West Bengal Budget document, repayment obligations on account of institutional loans, including market loans, for West Bengal in 2017-18 were Rs 12,689 crore, against Rs 4,189 crore in 2016-17 (revised), an increase of more than 200 per cent. West Bengal’s outstanding debt in the next fiscal is set to touch Rs 3,66,085 crore.
The state’s market borrowing in 2017-18 is set at Rs 44,840 crore, against Rs 32,000 crore in the present fiscal year, a rise of about 40 per cent.
According to the West Bengal Budget document, repayment obligations on account of institutional loans, including market loans, for West Bengal in 2017-18 were Rs 12,689 crore, against Rs 4,189 crore in 2016-17 (revised), an increase of more than 200 per cent. West Bengal’s outstanding debt in the next fiscal is set to touch Rs 3,66,085 crore.
The state’s market borrowing in 2017-18 is set at Rs 44,840 crore, against Rs 32,000 crore in the present fiscal year, a rise of about 40 per cent.
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