Kolkata: Unbridled cash transfer and “middleman intermediation” has helped in diversion of resources from West Bengal, SBI Research has commented on the
state of the state’s economy in a report. The report admits the old problem of unsustainable debt burden but also makes references to revenue leakages which have long been alleged by political adversaries of all shades. A number of workers of the former ruling party have been arrested over the past few weeks after the BJP assumed power in the state for what has been broadly described as the “middleman intermediation” in the report. The agency also mentioned that digitalisation of public services can help in plugging revenue leakages.
Scourge of middlemen and indiscriminate cash transfers
“West Bengal’s fiscal position has not been healthy with higher debt accumulation, despite higher share of Central Government grants. In a persistent trend, grants from the Centre and tax devolution to West Bengal over the years has always been more than 50% of overall tax revenue of the state. This has happened owing to rising unconditional cash transfers, higher off-balance sheet borrowings and higher committed expenditure and higher leakages in terms “middleman intermediation” siphoning of monetary resources,” the SBI Research report mentioned. In fact, after the BJP government led by chief minister Suvendu Adhikari took over, reports of many males getting women’s cash transfer scheme surfaced.
Unrealised potential of high non-tax revenue
The agency also mentioned how West Bengal always suffered from low non-tax revenues, ironically, the potential for which has been high always. It also mentions coal bed methane as a possible revenue source that has remained largely unrealised. “West Bengal has significant potential of higher non tax revenue that has been languishing over the years…enhancing general administrative efficiency remains key to increasing non-tax revenues,” the report stated, adding the state is the seventh largest in terms of coalbed methene reserves. The SBI arm also stated that it can turn into a hub of methanol production since it enjoys the locational advantage in CBM and coal gasification.
Linking Bengal with neighbouring states
The report thinks that operationalisation of an Eastern Multimodal Growth Corridor linking the neighbouring states of Bihar, Odisha and Assam with West Bengal via integration of the existing rail, road, port and inland-waterway assets can help in economic growth of the state.
Comparison between Left Front and Trinamool rule
SBI Research has also come up with comparative data on a few economic metrics to compare the performance between the Left Front and Trinamool Congress eras in the state. The SBI Research report has said that while the nominal GSDP of West Bengal increased 65.6 times during the Left Front rule of 34 years, it increased by 3.8 times during the Trinamool Congress regime of 15 years.
In terms of recevenue receipts, while the jump was 68 times during the Left rule, it was 5.2 times during the Trinamool era. Capital expenditure, which also is an indicator of the investment in income generating assets, rose 29 times in the Left era versus 9.6 times in the Trinamool era.
In 1978, when the Left came in power, the per capita income of West Bengal was the fifth highest in the country. bengal is now the 19th state in this rank in India, the SBI Research report said.
