Newsmaker: Amit Mitra

West Bengal CM's efficient paymaster

The transformation of Amit Mitra to a political leader is best captured through the change in his sartorial choices. Ever since he was pitched as finance minister (FM) of West Bengal in early 2011, Mitra gave up his suits for well-starched white dhoti and kurta for good.

On Friday, he was appointed head of the empowered committee of state finance ministers on the proposed national goods and services tax.

Dipankar Dasgupta, former professor at the Indian Statistical Institute in Kolkata, says Mitra's tenure has seen more transparency than that of his predecessor Asim Dasgupta.

Dasgupta was often accused of camouflaging the burgeoning debt. The earlier government kept borrowing, without raising additional resources. Mitra is credited for making an honest effort in raising the tax base through higher compliance.

Yet, Bengal remains one of the most indebted states in the country, with total loans close toRs 2.99 lakh crore (budget estimate 2015-16), from Rs 2.04 lakh crore in 2011-12 (Budget estimate), an addition of Rs 95,000 crore in five years. The ratio of debt to gross state domestic product (GSDP) is one of the highest among all states at around 35 per cent.

Mitra has been instrumental in ushering reform through digitising the tax collection machinery. West Bengal's own collections increased from Rs 65,574 crore in 2011 to Rs 1.33 lakh crore by March 2015. The ratio of own tax revenue to GSDP increased from 4.46 per cent in 2010-11 to close to 5.7 per cent in 2014-15.

"It is very difficult to cut expenditure, given a number of fixed costs like high salaries, pension and servicing of debt. In the case of West Bengal, much of the fiscal improvement has taken place on account of better efficiency," said Devendra Pant, chief economist at India Ratings & Research.

Mitra is also seen as the brain behind the annual investor summits. He was instrumental in getting people such as Mukesh Ambani of Reliance Industries, Niranjan Hiranandani of Hiranandani Group, Subhash Chandra of Essel Group and Sajjan Jindal of JSW Group at the summits. Sources in the government claim if returned to power, the second term of the Mamata Banerjee-Amit duo will be marked by a stronger pitch for industrialisation.