Mamata asks for help, Centre says hike taxes

The Union finance ministry wants the West Bengal government to raise taxes and present an early budget if it wants Centre's financial help. Saubhadra Chatterji reports.

The Union finance ministry wants the West Bengal government to raise taxes and present an early budget if it wants Centre's financial help.

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Chief minister Mamata Banerjee, worried over the state's financial health, called finance minister Pranab Mukherjee on Saturday minutes after he returned to his office from his Chennai visit.

"I will go to Kolkata soon to talk to the CM about the financial situation of the state," Mukherjee told HT. This will be the third meeting between the two on the issue.

During the conversation Banerjee said Bengal was in "dire straits" and demanded that the Centre "must do something for Bengal". Mukherjee assured her of "all possible help" to meet the state's annual establishment expenses of R28,000 crore.

At the same time, Mukherjee insisted that her government must present a full budget as early as possible to raise tax rates. Giving an example, Mukherjee said, "Bengal government has not imposed water tax so they are not getting adequate fund under Jawaharlal Nehru National Urban Renewal Mission."

When Banerjee said her government had recently passed a budget, Mukherjee pointed out that it was just a vote on accounts. A full budget, Mukherjee explained, would enable the state to raise taxes to strengthen the revenue generation.

Recently, Bengal finance minister Amit Mitra had come to meet Mukherjee. According to sources present at the meeting, after hearing some of the demands Mukherjee advised Mitra to read the constitution of India for a better understanding of the centre-state relations.

As the state is seeking help, the Centre emphasised Banerjee's government must improve its tax-GDP ratio that is currently 4.5, making Bengal one of the lowest states in the category.