Monday, June 6, 2011

Bengal not in a debt trap, says Asim Dasgupta

Hindu Business Line, May 20, 2011

Kolkata, May 19: Former West Bengal Finance Minister, Mr Asim Dasgupta, on Thursday denied that the State had fallen in a debt trap or that it was heading for bankruptcy, as is alleged by the Trinamool Congress.

“Following a revision of wages by the Pay Commission, there was a temporary financial stress.

“But we have been able to tide over it,” Mr Dasgupta told newsmen adding that contrary to the allegations levelled the fiscal and revenue deficits of the State had come down during the last year.

Dip in fiscal deficit

An increase in State tax revenue has resulted in a dip in fiscal deficit in 2010-11 to 3.9 per cent from the 6.2 per cent in 2009-10.

Revenue deficit too came down from 5.4 per cent in 2009-10 to 3.1 per cent to 2010-11.
The State's accumulated borrowings now stand at Rs 1.86 lakh crore.

“The State's debt to GSDP (gross State domestic product) has come down from 50 per cent to 40 per cent during the last five years,” Mr Dasgupta said adding that even the country had higher fiscal and revenue deficit ratios.

The Trinamool Congress in its election manifesto had pointed out that the State was in a debt trap and had one of the highest debt to GDP (gross domestic product) ratio in the country.

According to him, during the first two months of the current fiscal, the West Bengal government raised Rs 5,173 crore through issue of bonds to compensate a sharp fall in loans against small savings.

Small savings was affected due to hike in deposit rates by the commercial banks.

“The total borrowings during April-May 2011 are lower than the corresponding period of 2010,” Mr Dasgupta said.

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