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The West Bengal Finance Minister, Dr Amit Mitra, on Monday said that the Union Government should take measures to restructure the state's debt, which stands at more than Rs two lakh crore.
The restructuring process could include the elimination of a part of the debt, reduction in interest rates and extension in tenure of repayment. The debt recast will be over and above the state's demand for a moratorium on the Rs 22,000-crore interest.
The West Bengal Chief Minister, Ms Mamata Banerjee, had on Saturday given a 15-day deadline to the Centre for sanctioning the moratorium.
“We have asked for two things: first is a moratorium on the interest amount and the second one is an immediate effort to be undertaken for restructuring of debt. This could include elimination of certain debts as has been done in case of Greece and other countries; reduction in interest rates and elongated tenure for repayment,” Dr Mitra told newspersons on the sidelines of an industry meet organised by the Federation of Indian Chambers of Commerce and Industry here today. The Chief Minister, Ms Mamata Banerjee has already written to the Union Finance Minister on this issue, he said. The restructuring package could be put in place for a timeframe of about 20 years.
Meanwhile, talking about moratorium, Dr Mitra said that the Centre could allow the moratorium within constitutional limit, through a special window for debt stressed states.
“In Parliament, the Finance Minister had said that there was a category called the debt-stressed states, and West Bengal tops the list of such states followed by Kerala and Punjab. Thus, there is a window available with the Union government, within constitutional limit, for moratorium,” he said.
The moratorium was critical for the state, as the yearly savings of Rs 22,000 crore would translate into the creation of gross state domestic product worth Rs 88,000 crore, according to the theory of Keynesian Multiplier, he pointed out.
“The moratorium will bring in a tectonic shift in the development of West Bengal and put it on a new trajectory of growth,” he said.
Earlier on Sunday in Washington, Mr Pranab Mukherjee had said that the Centre has constituted a committee under the chairmanship of Secretary Expenditure to look into the issue of moratorium and suggest recommendations. EOM.
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