Managing the debt burden, which is estimated to touch ₹6 lakh crore till March 2023, and ensuring adequate revenue earnings could be some of the key challenges for Chandrima Bhattacharya, West Bengal minister of state for finance (independent charge), as she tables the state budget for the financial year 2023-24 in the assembly on Wednesday.
According to senior economists, one of the key issues confronting the state government is revenue earning. Though West Bengal has been earning high revenue from GST, but that may not be adequate as there has been a huge increase in spends under the various social sector schemes over the last ten years.
It is to be noted that the total expenditure on social service sector in 2010-11 was ₹6,846 crore which grew to ₹40,297 crore in 2020-21. The overall growth of expenditure on social infrastructure increased about six times on actual figures over the period 2010-11 through 2020-21. During the financial year ending March 31, 2011, which was the last fiscal under the previous Left Front regime, the State’s accumulated debt was ₹1.90 lakh crore.
High debt burden
“Though the debt is higher but it is not so alarming. What is alarming is the fact that despite such high debt the State continues to invest heavily on social sector and development schemes. The social sector expenditure by West Bengal government is close to 8.45 per cent of GSDP and is the second-highest after Uttar Pradesh. This is very alarming,” Debnarayan Sarkar, retired economics professor at Presidency University told businessline.
According to Byasdeb Dasgupta, Head of Department of Economics at Kalyani University, it will be a very tight budget.
“On one hand the government has been increasing its expenditure on social sector schemes and on the other hand state government employees are staging protests demanding the government to pay them DA (dearness allowance) at par with the rate for central government employees. It is not sure whether the state government will do it (increase the DA) due to revenue constraints,” he said.
Moreover, the government has been trying to attract investments into the State for the past five years, but has not witnessed any major investments coming in so far. For investments to happen there is a need to invest on creating infrastructure.
“This would again require capital expenditure by the government but given the present situation the government may find it difficult to invest on it due to revenue constraints,” said an economist on conditions of anonymity.
West Bengal has been witnessing good growth in excise collections. There are indications that the government might stress on further increasing excise duty targets so as to be able to increase revenue collection, sources said.
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