WB to go for Rs 3000 cr market borrowing

As an interim measure to pay off accumulated bills, due since November 2010, the West Bengal government has decided to go for Rs 3000 crore market borrowings.

Addressing a press conference today, Amit Mitra, finance minister, West Bengal, said that accumulated liabilities from November, 2010, till March, 2011 stood at Rs 3,500 crore as no bills were paid from the treasury.

The earlier Left Front government had imposed an embargo on bill payments, which would be lifted from tomorrow, he said.

"A liability of Rs 3,500 crore has been thrust on the new government," he said.

Mitra said as an interim measure, the government has decided to go for market borrowings of Rs 3,000 crore and a Rs 500-crore loan from small savings. The payment of bills would start from tomorrow, he added.

Mitra also accused the previous Left Front government of gross financial mismanagement putting the state on the brink of insolvency.

"No sovereign government can afford to stop payment of bills," he said.

Mitra said that state was maintaining a negative treasury balance, including overdraft, from November 10, 2010 till March 09, 2011. As on April 2011, the treasury balance of the state was running negative of Rs 3291 crore, he said.

He said that as per RBI data, revenue deficit (RD) of the state during 2010-11 was Rs 16,441 crore, with revenue expenditure at Rs 64,014 crore and receipts at Rs 47,571 crore.Yesterday, Asim Dasgupta, former finance minister of West Bengal had said that Centre should have extended financial assistance to the state last year itself.

In response, Mitra said, "It was not the case."

Citing an example, Mitra said that on September three 2010, the state had sought a central grant of Rs 2,985 crore.

He said that the demand for the grant was subsequently reduced to Rs 1,345 crore on 3 December, 2010.

The next day, the state intimated the Centre that the need for the grant was over.

"Does this show that the state had sought cooperation from the Centre"? he asked.

Referring to the recent meeting between Chief Minister Mamata Banerjee and Union Finance Minister Pranab Mukherjee in which he was also present, Mitra said, "Very positive signals have emanated from the meeting."

A detailed discussion would be held at the secretary level between the state and the Centre followed by ministerial level talks. Following this, the quantum of assistance for the short, medium and long term horizons would be determined, he said.