West Bengal’s revenue deficit is likely to touch the Rs. 18,000 crore mark by the end of the current financial year 2012-13, which would be almost triple of the budget estimate figure of Rs. 6,858 crore.
West Bengal finance department officials have calculated the figure on the basis the findings of Reserve Bank of India (RBI) in its report “State finance: Study of Budgets, 2012- 13,” where Bengal has been projected as the prime laggard in all aspects of state finance. Revenue deficit implies the excess of expenditure over revenue, or in other words, how impoverished are the revenue resources of the state compared to its expenditure.
The higher it is the higher is the need for the government to raise resources from other sources like the Centre and debts. In turn, it raises the debt of the state.
Sources from the state finance department said the huge revenue and fiscal deficit would arise due to multiple counts namely massive increase on account of payment of interest and principle on the debt accrued, unnecessary rise in expenditure incurred not mentioned in the budget and reduction in the state’s share in loans from the Centre. “The fast decline in the rate accumulation in state’s small savings schemes resulting in a fast decline in the state’s share in central loans will be yet another factor behind such high revenue deficit,” a state finance department official said.
As per rules, 80% of the small savings collection from a state is passed as loans to that particular state, with a five-year moratorium on payment of the principal amount. It is perceived that small savings, a sector where West Bengal had traditionally been the forerunner in accumulation, has lost its sheen here only in face of absurd promises of returns by the chit fund companies.
As per RBI statistics, the total accumulated liabilities of Bengal by the end of the current financial year is expected to touch Rs. 2.30 lakh crore, the third highest among all Indian states. As of the off-budget expenditure, the Mamata Banerjee-led government had been facing strong criticisms from all quarters for its expenditure on charity, grants to clubs and organising festivals.
According to the estimates of state finance department officials, West Bengal’s fiscal deficit is expected to be around Rs. 22,000 crore, which is again much higher than the figure of Rs. 15,923 crore as projected by the state finance minister, Amit Mitra, in his budget speech for 2012-13.