Mamata's populist sops to cost Rs 400 crore a month

A slew of populist measures announced by West Bengal Chief Minister Mamata Banerjee over the past two months are likely to make the state exchequer poorer by Rs 400 crore (Rs 4 billion) a month.

More than a dozen schemes have been announced since the new government took over, with Naxal-dominated Jangalmahal finding a special place.

The expense of small but voluminous schemes announced by Banerjee so far, excluding the more recent ones announced for Darjeeling, would cost Rs 400 crore every month, said a government official.

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What's more, most Cabinet-approved schemes were yet to be passed by the state finance department, added the official. 

When contacted, C M Bachhawat, the finance secretary, refused to comment, but said: "Whatever proposal the Cabinet passes should come to the finance department for clearance."

Ironically, state finance minister Amit Mitra had recently said West Bengal's debt would increase to more than Rs 2,00,000 crore (Rs 2,000 billion) this year, with an embargo on payment on bills worth Rs 3,500 crore (Rs 35 billion), because of the financial mess created by the previous government.

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"It will be difficult to offer the unlimited sops, given the financial situation," an official said, adding there was hardly any internal generation of funds.

That's probably one reason why West Bengal is yet to give a road map for fiscal consolidation to the central government, which Finance Minister Pranab Mukherjee has been seeking in lieu of the much promised assistance to the state.

Recently, West Bengal got one of the highest hikes in annual allocation from the Planning Commission at Rs 22,214 crore (Rs 222.14 billion), 27 per cent more than last year.

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Government officials, however, said the state was unable to provide a road map for fiscal consolidation due to low resource mobilisation, as it had traditionally been dependent on ways and means advances and overdrafts from the Reserve Bank of India.

Mukherjee has been insisting the state government raise taxes and present an early Budget, if it wants the Centre's financial help.

The Centre has also insisted the state present a full budget as early as possible to raise tax rates.

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The sops

In June, when the United Progressive Alliance government raised the liquefied petroleum gas cylinder price by Rs 50, the state government withdrew a cess of Rs 16 per cylinder, thus reducing the effective price rise to Rs 34.

The state government has also taken a tough stand against demands of fare hike by public transport associations, stonewalling inflationary trends.

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Soon after coming to power, Banerjee raised the fund allocation for North Bengal Development Council to Rs 200 crore (Rs 2 billion), from Rs 60 crore (Rs 600 million), to pacify separatists in the region.

This is in addition to the 27 projects listed under the Gorkhaland Territorial Agreement, some of which will be jointly funded with the Centre.

In another demonstration of populism, the Kolkata Municipal Corporation decided not to collect water tax from 127 municipalities, against the rules laid down by the Jawaharlal Nehru National Urban Renewal Mission.

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On her recent visit to Bankura, Banerjee declared all tribals living in Jungle Mahal below poverty line families.
Earlier, the government had decided to provide rice at Rs 2 a kg to tribals with annual earnings of Rs 42,000 or less in the region.

That's not all: 10,000 jobs under the national volunteer force, home guards and police, setting up of 900 schools, international tourist centre and other welfare measures are also part of a special package.

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Banerjee's announcements also include setting up of 17 industrial clusters, for which the West Bengal Industrial Development Corporation would acquire land.

In the education sector, the state has decided to recruit 46,000 primary school teachers. Also, the government will pay provisional pension to school teachers within 30 days of retirement.

The government also plans to appoint 650 teachers in the state madrasas and set up super specialty hospitals in four districts.