Opinion Failing the numbers

Banerjee’s first statement as chief minister was that her government would return 400 acres of Singur land to farmers,sending a strong signal to industry that land acquisition was their problem,not hers. Even if the government talks about giving a big boost to small and medium enterprises,how will these grow without big industry? That’s a question the new government doesn’t appear to answer.

In her 100-odd days in power,the most significant statement from Banerjee has been the one on bandhs,since the tea and tourism industry in the Darjeeling hills is in trouble because of extended blockades. Asking all political parties to shun bandhs and blockades — an instrument her party had used with terrible ramifications during the Singur agitation — she said there was a need for a legislation in this regard. Regarding the economy,however,there haven’t been any bold steps.

In early August,Finance Minister Amit Mitra unveiled an abstract of the annual financial statement in the assembly,where he admitted that since an incredible 93 per cent of the state’s earnings was being spent on salaries,pensions and interest payments,he would reduce the share to 74 per cent. It was a promise he should have kept,but when he placed the finance bill at the end of the month,there were hardly any brave or new tax proposals to mop up revenue. Even as he said that the salary payouts would shrink,he also pointed out that the allocation for salary and pension would be hiked because the chief minister had announced at least 10,000 new jobs.

He appeared to take the easy way out by increasing taxes on liquor and cigarettes,and hoping for better tax compliance from citizens to increase revenue by 30 per cent. The tax on liquor and cigarettes can garner Rs 300 crore at best,which leaves the government short by a long way. Some drastic measures are needed to raise revenue. Why isn’t the tax base being widened? Why aren’t more goods and services being taxed? Why isn’t the government allowing a power tariff revision? Every economist is shouting from the rooftop that the tax base needs to be broader to increase revenue,the minister appears to follow the populist route.

At her victory rally at the Brigade Parade Grounds,Banerjee said her government was waiting for funds promised by the Centre. With her party,the Trinamool Congress,being one of the most important allies of the Congress and with Banerjee being an aggressive negotiator,her government got quite a boost from the Centre,much to the chagrin of neighbouring states like Bihar and Orissa. First,the Planning Commission hiked the annual outlay to Bengal to

Rs 22,214 crore,with the Centre agreeing to pay about 41 per cent,a significant amount. Then,the Centre announced a special package for the state,which included a grant of Rs 9,240 crore and permission to raise Rs 2,000-odd crore from the market. But a friendly Central government can only do so much,the rest is up to the state government,which has shown intent to kick-start the economy only on paper. In reality,there have been only a slew of populist measures and empty rhetoric.

The writer is a senior editor,‘The Financial Express’,sudipta.datta@expressindia.com