Notebandi pushing state to economic crisis: CM Mamata Banerjee

KOLKATA: Chief minister Mamata Banerjee on Monday warned that the Centre’s demonetisation move was slowly nudging Bengal to financial distress with the state’s revenue already taking a hit of Rs 5,260 crore, which is nearly 11% of its annual collection. According to the CM, the ground-level implications could be “catastrophic” as all key sectors were shrinking at an alarming rate.
“While income and revenue have taken a bad hit, developmental works (and the funds devolved) have stopped,” Banerjee said.Preliminary estimates, she added, show that Bengal’s economy had shrunk by 25% in the last month alone. “The iron-and-steel sector has dwindled by 25%. The FMCG sector, likewise, by 25%. Cement and electronic goods sectors have contracted by 15%. People are being fully bulldozed,” she said at a government-sponsored motion against demonetisation.
“The PM speaks of plastic money, advertises for Paytm himself. Take one example. Of the 37,945 Bengal villages only 3,570 have access to banks. Not even 10%. Credit card khabe na mathaye debe (What will they do with credit cards)? And their only link — post offices — are being increasingly folded up,” Mamata rued.
For a state like Bengal, she argued, which is primarily an agrarian economy, the impact has been worse. “Cultivators have no money to pay for their produce to be collected from their fields and sold. They are being starved of cash. The cooperative banks, the rural cooperatives can’t loan money. It is a catastrophic situation,” she argued. Urging the opposition to come forth with suggestions to deal with the crisis, Mamata said this was not the time for political fights.
India, Mamata argued, had survived the 2008 global financial meltdown because of “our cash-economy”. “It is the poor households, who deal primarily in cash — and are outside the banking ambit — for which we survived the crisis,” she explained. “I am not an economist, but I believe the small savings at homes, the cash inflow and outflow, which didn’t let the problem precipitate as banks grew desperate to ward off the setback. Now you are sucking this cash – or lifeline – out of the economy,” she claimed.
“Chandrababu Naidu dials RBI and gets crores. I, too, have been pleading for it but didn’t get any. Isn’t this discriminatory? Rs 500 notes are being given to states which are ruled by BJP or pro-BJP. But as Bengal and UP had opposed the decision, the notes are not being circulated in these states,” Mamata alleged.