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Sanity from the common man

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April 23, 2012

Changes of government do not reset the calendar to year zero, as the French Revolution proved through its remarkable lack of success in this. Unfortunately the petulant demands of the new government of west Bengal that the rest of the country shoulder its development burden without expecting debts to be repaid amounts to exactly that. The voice of the common man is heard in this letter to the editor published in DNA

This has reference to ‘Bengal’s interest: Didi sets 15-day deadline for Centre’ [1] (April 22). Mamata Banerjee has asked the Centre to decide on her demand for a three-year moratorium on the interest her state pays as debt. West Bengal pays annually Rs. 22,000 crore to the Centre towards debt servicing for repayment of loans taken by the CPI (M)-led government. Though the demand may ring true, it will set a bad precedent. Other states too will demand such moratorium. Setting the deadline for accepting her demand is tantamount to blackmail. It is not a healthy sign for a democracy. She is exploiting the weakness of the coalition UPA government.

The government of West Bengal is reported to have started its own newspaper and TV news channel [2] to spell the achievements of the government. It is a negative move. People can well read the achievements of the government from the implementation of welfare programmes. There is no need for any advertisements of government programmes. Also, railway minister Mukul Roy’s proposal to include a column asking for political leaning in railway reservation forms just to avoid Left party sympathisers travelling along with others, especially TMC supporters, is surprising. Hope such people are not sent out of West Bengal. Let Didi first govern the state well, stop deaths of babies in hospitals [3] and crime against women [4].

May 2, 2012

IE reported on the lever that the Trinamool Congress will try to move:

Sources suggested that Mamata will be spelling out her demand for a moratorium on the huge debt burden on West Bengal. Considering the timing of the Trinamool’s decision to raise the pitch on this six-month-old demand, the moratorium — for three years to begin with followed by a possible 10-year debt restructuring plan — is expected to be Mamata’s leve-rage in the presidential election. Her party holds 4 per cent of the vote in the presidential electoral college.

ET puts financial meat around the bare-bones political analysis above:

According to reported data Bengal’s total borrowings have reached 208,382 crore (revised estimate) in the last fiscal – up from 187,387 crore as in March 2011. The state has forked out an estimated 23,000 crore as interest payment in 2011-12 as against its total tax revenue of close to 25,000 crore.

The finance ministry, the officials said, has made this clear – the Constitution does not allow discretionary powers like interest moratorium to be used for a single state. Banerjee had given a 15-day ultimatum on April 21 to the Centre to act on her demand for the moratorium. She had met finance minister Pranab Mukherjee last week on the issue.

Murkherjee had also told Banerjee that constitutional provisions barred a special moratorium, and also similar demands from other states like Bihar haven’t been granted. West Bengal has demanded a three year moratorium on interest payment and a debt recast.

A senior official said the only quasi-exception was made for Punjab in the 1980s when the state was severely affected by militancy. But that, the official said, was a highly unusual situation, while the problem with Bengal is “poor management”.

A report being prepared by a committee led by Sumit Basu, the Union expenditure secretary, is looking at three states – Bengal, Kerala, Punjab – that can land in a debt trap by 2014-15.


Written by Arhopala Bazaloides

April 23, 2012 at 5:04 am

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