Restructure States’ debts: Amit Mitra

West Bengal Finance Minister Amit Mitra on Friday made a strong pitch for restructuring of the huge debt liability of the State.

“It is ironical that the Centre could pay $10 billion to bail out Greece, but not West Bengal,” he said.

Addressing reporters after presenting the annual Budget, Mitra pointed out the situation in Bengal was akin to a “debt trap”.

Chief Minister Mamata Banerjee earlier called for a joint appeal to the Centre along with other debt-stressed States such as Kerala and Punjab.

According to the Budget documents, as on March 31, 2016, the debt burden stood at ₹3,04,941 crore. It is expected to go up to ₹333,812 crore this fiscal. Considering parts of loan will be due for repayment (over and above the annual payment of interests) beginning this fiscal; the State may have to opt for fresh borrowings to service the debt.

“The Left Front borrowed heavily from the market without thinking about future repercussions. Now we are paying for it, as neither the UPA nor the NDA regime paid heed to our request for a moratorium,” Mitra said.

During the five-year stay in power, the Mamata Banerjee-led West Bengal government borrowed nearly ₹113,105 crore. Of the total, ₹94,600 crore were used in debt servicing, he said, adding that the current government utilised ₹18,571.44 crore of the loan so far.

Mitra pointed to doubling of tax revenue to ₹42,920 crore and improving the share of revenue expenditure as a percentage of revenue receipt from as high as 124.8 per cent in 2011-12 to 108.82 per cent in 2015-16.

Fiscal deficit reduced from 3.35 per cent to 2.68 per cent. However, the own tax-to-GSDP (gross state domestic product) ratio declined from 4.72 per cent to 4.57 per cent. This is despite doubling of GSDP to Rs 920,083 crore. It indicates low contribution of organised sector in GSDP.

“Improved fiscal deficit will lead to improved revenue collections,” he added.

He is banking on simplification of tax procedures to increase compliance that was key to higher tax revenue in the first term of the government.

For the current fiscal Mitra refrained from hiking tax rates and announced further simplification measures. Submission of paper TDS certificates for VAT refund is done away with. Time limit for disposal of appeal cases are reduced from one year to six months. To reduce litigations, the State “would not go for appeal where the disputed amount is less than ₹1 lakh.”

Exemption limit for salaried for professional tax is increased from ₹8,500 a month to ₹10,000 a month. Tea industry is exempted from payment of rural employment and education cess for another year. The benefit was extended last year.

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