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Left front to go bankrupt on may day

The Left Front will go bankrupt on May 1, the International Workers’ Day. No, it is not a joke but a prediction by Union finance minister Pranab Mukherjee.

india Updated: Apr 16, 2011 15:33 IST
Snigdhendu Bhattacharya

The Left Front will go bankrupt on May 1, the International Workers’ Day. No, it is not a joke but a prediction by Union finance minister Pranab Mukherjee.

Flanked by UPA chairperson Sonia Gandhi, Mukherjee said, “The state exchequer is empty and the government will not be able to pay salaries to its employees on May 1. They will start crying that the Centre is not allowing them overdraft,” said Mukherjee on Bengali New Year, the day accounts are started traditionally in Bengal.

Mukherjee’s allegation comes a few days after chief minister Buddhadeb Bhattacharjee claimed that the state government would be able to pay salary on the first day of month. “Our critics are lying and trying to misled the people.

The state government is facing no financial crisis,” said the chief minister at a rally in his constituency Jadavpur.

Taking a directly opposite stance, Mukherjee said, “The Left has made the exchequer bankrupt. This government needs to be changed.” His grim prediction comes four days after he sounded a debt trap warning, saying West Bengal is one of the three states that can slide into a debt trap by 20014-15. “According to financial review three states are heading for a debt trap by 2014-15, out of which one is West Bengal. In the last fiscal year, it had a total debt of Rs 1.62 lakh crore,” said the Union finance minister at a news conference on April 11.

A debt trap is defined as a situation where a government has to make fresh borrowings just to keep its neck above water. Obviously, the new debt is incurred to pay off old ones, raising the debt burden of the state even more.

West Bengal’s financial crisis has come under sharp focus during the run up to the polls with the government being forced to stop all payments, just to keep salaries and pensions going. The debt burden has been labelled as one of the state’s biggest problems by various campaigners, including both Rahul and Sonia Gandhi.

The burden is so unsustainable that Rs 20,753 crore, which is 92% of West Bengal’s tax revenue of Rs 22,535 crore, is paid out to service old debts (according to 2011 figures finance minister Asim Dasgupta presented to the Assembly).The state finance secretary has been camping in New Delhi for the past few days reportedly to raise fresh debts of Rs 1,400 crore. Senior bureaucrats in the state secretariat think it would be impossible to pay salaries and pension without this new loan.