Mitra joins issue with Jaitley over loan

West Bengal finance minister Amit Mitra today reacted sharply to Union finance minister Arun Jaitley's comment in the Lok Sabha that one should take loan as per its repaying capacity, describing it as "shocking".
"We are shocked... The people of West Bengal are stunned by this statement of the finance minister... How can he take the matter so lightly?" Mitra said at the state secretariat.
The erstwhile Left Front government had left a mammoth debt for the present Trinamool Congress government to repay, Mitra said and pointed out that it was the Centre which had granted loans to the state and so had the responsibility of looking after the repayment issue too.

"Without the Centre's sanction, the state cannot get loans... So the Centre has the responsibility in seeing the repayment issue also," Mitra said.
In the 2011-2016 period, the state had paid Rs 1,40,722 crore by way of repayment of loan to the Centre, Mitra said adding that the state government had paid Rs 42,312 crore as interest for the market borrowings, including bond and small savings, made by the Left Front government.
Referring to the Centre pledging USD 10 billion from the International Monetary Fund for debt restructuring to countries like Greece and others, Mitra said "They can give it for debt restructuring to other countries, but not to the states."

"The central government is witnessing that the loans taken by West Bengal are growing rapidly and is heading towards a fiscal crisis... It puts up a question on the existence of the federal structure," Mitra said.

State Chief Minister Mamata Banerjee had met Prime Minister Narendra Modi and Finance Minister Arun Jaitley seeking a loan waiver and adequate central funds for the state.
"The government should do some plan to restructure the debt. Otherwise, all states in the country will be heavily debt-ridden," Mamata said had said after the meeting.
Mitra pointed out that in the next five-year period (2016-17 to 2020-2021) the state government needed to repay around Rs 1 lakh crore as principal for the loans taken by the erstwhile Left Front government.

The total amount the state needed to repay inclusive of the principal and the interest would add up to Rs 2,53,910 crore in the next five years, he said.
The TMC government in the last five years had taken a loan of Rs 1,13,000 crore out of which Rs 94,000 crore was spent towards repayment of loans taken by the Left Front government, Mitra stated describing it as a 'debt-trap'.