Not being an economist and writing on the economy is fun, as you can get away with murder, just as famous economists double up taking cooking classes!
I do not know if the heat from the ED notices to Trinamool Congress Gen Secretary and his wife, or her confidante in Birbhum, the CM of West Bengal, was shrieking, warning that India could go on Sri Lanka’s way. Mamata Didi did an unthinkable; she went to Raj Bhavan to meet the Governor, her bête noire. Anyway, I thank Mamata Banerjee for letting loose a topic for debate.
Firstly, comparing Sri Lanka to India is a fallacy. The island has an $80 Bn GDP against India’s $3 Trillion. Sri Lanka’s forex reserves are $2Bn, and ours exceed $622 Bn, the fourth-highest globally. Additionally, India has 754 tons of Gold and ranks among the top ten nations with the highest gold reserves. Sri Lankan refineries have stopped operation for want of crude, and food and essentials have vanished. Sri Lanka is facing bankruptcy. India faced an economic crisis in 1991 but soon recovered. But even then, we were better off than today’s Sri Lanka. India has assisted Sri Lanka with $2.4 Billion of loans and aid now.
Didi, having opened the pandora’s box on the economy, a few states, which incidentally include Bengal, have resorted to high freebies as a part of the election manifesto and landed in huge debts. At the top of the list is Punjab, followed by Bengal. When Mamata became the CM, she inherited a debt of 1.92 lakh crores, which would be touching 6 lakh crores this fiscal. The State’s revenue deficit could be around Rs. 53000 crores. The State borrows from the open market nearly Rs.20000 crores each year at high-interest rates that might lead to a debt trap.
Mamata has unending populist schemes, of which only a few are progressive and meaningful. Doles given to Durga Puja organisers and clubs are merely to keep the lot happy and content. West Bengal is a consumer market, not a manufacturing one, and is a net gainer in the GST regime. Its main resources are realty, fuel, and liquor. Contributions from the manufacturing sector must grow to balance the deficit, but it is a far cry, given the scant regard for industries. The former finance minister, supposedly an economist, had to contend himself as the Chief Principal advisor, finance and had nothing new to offer other than glossy business summits and bombastic announcements on investments.
A group of retired and failed bureaucrats surround her like a wall, whispering the glory of Bengal and her eventual elevation to the top legislative post, the Prime Minister of India. The constant confrontation between the State and the Centre has put West Bengal at a disadvantage, a fact very few in the government will dispute.
States’ indiscriminate borrowings, not limiting to West Bengal, must be regulated to fit into a better fiscal system. Passing on huge debts over to successive regimes is regressive and will harm the growth of the State.
I recently read a statement by a senior and former bureaucrat that West Bengal is the HR capital of India. How true! I visited Andhra Pradesh, Karnataka and Tamil Nadu and found most eateries employing Bengali boys, a few in the IT sectors. Does anyone have the guts to explain why these youths have to go to different States? It is no use getting angry or content with a bloated ego or brand anyone who dares to question as an agent of the opposition party.
The writing on the wall is clear, ‘Change and now!’
Sampath Kumar
Intrépide Voix
