Finance Commission takes note of Bengal's debt restructure demand
Kolkata: The Fifteenth Finance Commission has taken a serious note of the state's demand for debt restructuring, so that it doesn't become "a permanent drag on the economy of Bengal".
The "legacy of the debt overhang" of Bengal has come up as a major issue in the meeting of the Fifteenth Finance Commission, with Chief Minister Mamata Banerjee, Finance minister Amit Mitra and other state government officials at Nabanna Sabhaghar on Tuesday.
A small film based on the different initiatives of the Bengal government was screened during the meeting, followed by a detailed presentation and discussion on the state's financial situation.
In a Press conference after the meeting, the Chief Minister said: "We expect that Finance Commission will consider our demand for debt restructuring or waiver…"
N K Singh, the commission chairman, said: "If interest payment on debt forecloses a large part of the government revenues, then of course that is a drag on which they (Bengal government) would like to see a structural solution."
"The Finance Commission has taken a serious note of the expectations of the government of Bengal," he said in the same breath, adding that the commission would explore all possible ways within its mandate to look into the issue.
Appreciating the Bengal government's endeavour in giving a detailed memorandum in advance that helped them to get a clear picture on the state's specific demands, Singh maintained: "The Bengal government has brought out very forcefully the need for the Finance Commission to look at the legacy issue of the debt overhang…and it could be redressed in a manner so that it doesn't become a permanent drag on the economy of Bengal."
When asked about its reaction on the state's demand for debt restructuring, the chairman said: "The views of the Finance Commission will be contained in the recommendations of the commission, which we will submit to the President of India. But a very robust presentation on the overhang of the debt issues was certainly very forcefully brought out both by the Chief Minister formally and in the detailed memorandum which was submitted to us."
The Chief Minister has maintained in the meeting that the last seven years have been challenging for Bengal, as it
has faced the legacy of huge debt burden and has repaid Rs 2.25 lakh crore in interest and principal and in the 2018-19 fiscal, it has to pay Rs 46,000 crore.
Highlighting the revenue gap against the projected GST revenue in Bengal that was 33.4 percent in August 2017 and has registered a surplus of 3 percent by March 2018, the Chief Minister has also placed the demand that the share of the states in the divisible pool be increased from 42 to 50 percent and this comes when the revenue deficit grant is of Rs 90,136.48 crore.
Singh also said: "We were also assured by the Finance minister that following detailed discussion with CSSO, any
discrepancy with regard to the key macro-economic features has now been reconciled and it is expected that some time in August, the new figures based on the reconciliation with CSSO would be published."