Friday, October 28, 2011

State has funds for development: Asim Dasgupta

TNN | Oct 28, 2011, 06.48AM IST

KOLKATA: Former finance minister Asim Dasgupta on Thursday pointed out "accounting fallacy" in his successor Amit Mitra's rejoinder to his slur against Mamata Banerjee. "In accounting propriety, revenue head shouldn't be added to capital head," said Dasgupta. He also turned down Mitra's request for a telephonic discussion on the fiscal calculations.

"Every number in this book speaks silently and I absorb every word. I stand by my own statement," Dasgupta said, holding up the "Trends of Expenditure and Growth Trajectories", tabled by the state government on August 11.

His second press conference in a week at the CPM headquarters turned out to be a classroom lecture (Dasgupta had taught economics at the ISI)to prove that Mamata had indeed talked out of her hat to claim that the Left misrule had cost the state so dear that she could only spend 6 paise for development out of every rupee earned.

Contradicting the CM's "misleading statements" at the National Development Council ( NDC) meeting in New Delhi to coax the centre for more bail-out funds, Dasgupta on Monday cited figures from the new government's financial statement to prove that the state, in fact, had 26% (not 6) funds reserved for development.

Less than 24 hours later, Amit Mitra jumped to the CM's defence to depict that a crucial category (loan repayment) had been omitted from the expenditure bracket. Resorting to the statistical legerdemain Dasgupta himself had often been associated with, Mitra said at Writers' Buildings on Tuesday: "His (Dasgupta's) presentation that the state's gross receipt is Rs 65,847 crore is true, but it boils down to Rs 59,462 crore because of the central grants that are barred from being used in the non-plan category." Mitra then invited his former Presidency college senior to telephone him for the clarifications.

On Thursday, Dasgupta said, "Quite so. These funds can't be used for paying salaries. But they can be used for development. Therefore, they must be added in the development expenditure category... If you start adding capital payment, you must also add the total capital receipt. Add Rs 21,794 crore to the revenue earning of Rs 65,848 crore and the sum soars to Rs 87,642 crore. After expending Rs 56,031 crore on salaries, pension, central loan repayment, transport subsidy etc, around Rs 33,000 crore would still be available for plan expenditure. This is no modest amount.

The low-down on the state's fiscal situation continued:

"This way, you would have spent 63% of the gross earning and are left with 37 paise from every rupee earned...You can't mix revenue and capital accounts. They (Mamata and Mitra) have combined the two in a glaring instance of accounting fallacy." These were his final words.

Defending the former Left Front government, Dasgupta said, finance minister defended the Left Front government's market borrowing spree, claiming that Rs 5,213 crore was raised in April-May alone "because tax receipt is low in the first quarter and the government had to resort to higher borrowing during this period,". He reiterated:

"The new government has borrowed Rs 10,000 crore in five months which is double of what we borrowed during the same period last year." He said he couldn't fathom why Mitra had added the Rs 3,000 "unpaid bills" in the spending bracket (it didn't figure in the financial statement tabled in the Assembly) since "payment is a continuous process and, thus, remained pending".

Shooting down Mitra's allegations that his government had left a Rs 4,800 crore DA burden on the new one, Dasgupta tom-tommed the Left Front's policy of including teachers, municipal employees and others within the purview of DA. He said, "In the last vote-on-account we had kept aside money for DA. It's for the present government to decide when it will be paid."

Finally, on Mitra's jibe that Bengal was the only state to extract coal royalty as well as cess, Dasgupta said, "Ours is the only state that has been discriminated against this revenue income. A Supreme Court ruling backs this. If Bihar and Jharkhand haven't claimed the money, it's because their Coal Cess Act was nullified."

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