Mamata Banerjee meets Modi with a ‘long list’, PM assures all help
New Delhi: Prime Minister Narendra Modi on Monday assured West Bengal Chief Minister Mamata Banerjee that the Centre will leave no stone unturned in aiding the development of the state, but is understood to have been non-committal on her request for a debt waiver from the Centre. Banerjee's first meeting with Modi after he became Prime Minister comes against the backdrop of acrimony between her party Trinamool Congress and BJP.
Seeking a special financial package for her debt-ridden state, Banerjee initially met Modi in Parliament House before calling on him again with a delegation of MPs from her party. The West Bengal Chief Minister -- who voiced concern over the funds pending for schemes like MNREGA and ICDS – said that Modi praised the state's financial performance in raising the revenue and assured help in maintaining fiscal discipline.
"The PM said that Bengal's loan was maximum in comparison to other states. But he appreciated our efforts in keeping the financial discipline... He also praised our efforts and hoped that financial situation will improve further. "He (PM) said we will try (to help) because the country is also facing a crisis on financial front. 'We will try to see how we can help the state' he said," Mamata told reporters.
However, according to a TMC MP who was part of the delegation, the Prime Minister was non-committal on the debt waiver issue. At the meeting, Banerjee raised the debt problem, which she has said was mostly a result of the actions of the previous Left government. "Today, all our party MPs met PM and before that I also met him. We apprised him of Bengal's financial situation. We came to power in 2011 and the loan was taken before that.” "The loan was about Rs 1 lakh crore from RBI. It was not our fault. The loan was not taken by us but by the previous Left government," she said.
Saying that the debt burden, leading to high interest payments, was affecting the development expenditure in Bengal, she asked for debt relief and relief from interest payments. "The Centre takes away all the money, so how will the state develop and how will the poor benefit? Road (building) work, food procurement, 100-day minimum work... how will it will? Banerjee said. "We have sought waiver of the loan for carrying out development work," the chief minister said.
Banerjee targeted the Left for the financial worries facing WB, saying, "They were not following fiscal responsibility. But we are following financial discipline and our revenue collections have gone up. It was Rs 21,000 crore, now we have doubled it." Meanwhile, according to a release issued by the Prime Minister's Office (PMO), Modi explained to Banerjee during their meeting that he is a firm believer in cooperative federalism.
The Prime Minister has constantly been saying that only strong states can make a strong India and, therefore, states must be strengthened to meet the development needs of their people, the PMO said. "West Bengal and Kolkata have to develop, for their own sake, and for the benefit of the region. That is why we have the 'Act East' policy. The region has talented people and a lot of resources. The Prime Minister stated that he is fully committed to West Bengal's and Kolkata's development," it added.
It is with this in view that the Centre has agreed to devolve 42 per cent of the divisible pool of taxes to states for the next five years. This is unprecedented and a rise from 32 per cent which is the current share, the PMO said. In addition, the Centre has accepted other recommendations of the 14th Finance Commission relating to Revenue Deficit Grants and other Grants, it said, adding that, among the large states, WB is one the most important beneficiaries of this decision.
Talking to reporters outside Parliament, Banerjee said, "We have sought funds which are the state's due for food procurement, 100-day minimum work under MNREGA, and ICDS projects. We also raised the issue of pending railway projects with him (Modi) because many railway projects are stagnating in the state. "He assured us help and said he is happy with Bengal's performance."
Asked whether she had raised the Teesta water issue with the Prime Minister, she answered in the negative. According to statistics released by PMO, the major benefit for WB is the tax devolution in the next five years which, from 2015-16 to 2019-20, will be around Rs 2,90,000 crore as compared to Rs 1,06,000 crore in the last five years. This is an increase of Rs 1,80,000 crore, or a 174 per cent jump. WB's share of taxes has been increased from 7.264 per cent to 7.324 per cent, it added.
According to the PMO, WB is getting a Revenue Deficit Grant of Rs 8,449 crore in 2015-16 and a total Revenue Deficit Grant of Rs 11,760 crore. The only other non-special category states getting the grant are Kerala and Andhra Pradesh. The Revenue Deficit Grant takes into account the interest burden on the state due to debt. Therefore, the total additional resources going to WB in the next five years will rise by Rs 2,05,900 crore, an increase of 174 per cent over the last five years as the figure is set to go from Rs 1.18 lakh crore to Rs 3.24 lakh crore, it said. The tax devolution to WB in 2015-16 will rise by Rs 13,000, the PMO added. It was Rs 25,340 crore in 2014-15 and is estimated to be Rs 38,461 crore in 2015-16, it said.
WB is getting a Revenue Deficit Grant of Rs 8,449 crore in 2015-16. There are also grants to Local Bodies, which have almost doubled, the PMO statement said. If all these transfers are put together, on a year-to-year basis, the increase in resources to WB will be Rs 22,000 crore in 2015-16 compared to 2014-15, an increase of 80 per cent, it said. According to the statement, on the problem of debt, the Prime Minister said, "You (WB) have inherited a large burden. We, too, have inherited a large burden. The Centre and the states have to collectively find a solution to this.”
"In any case, the 14th Finance Commission has taken into account the interest burden on states and has fully compensated the revenue deficit arising as a result of this.” "This is why WB is getting an additional Revenue Deficit Grant along with only two other non-Special Category states. Therefore, interest burden should not affect development activities any more in the future."
The additional financial resources being made available by the Centre from the current fiscal onwards will substantially improve the position of the state to discharge interest liability and free up funds for developmental works, Modi said. He also pointed out that the Centre has decided to give WB the royalty on coal and other minerals. That will provide a benefit of Rs 1,600 crore to the state annually.
In addition, the state will get Rs 11,200 crore from the coal blocks that have been auctioned so far and there will be even more revenue in the future, he said. In this scenario, WB is better placed as compared to the past and has adequate funds to meet its development needs fully, he added. On the issue of releasing funds under MNREGA, the Prime Minister assured Banerjee that the scheme is fully provided for. WB has already received Rs 3,744 crore this year and pending claims of Rs 1,500 crore will be settled in March itself, he said.
