No bailout package for Bengal now, hints New Delhi

KOLKATA: For Bengal, no package is in store for the moment or anytime soon. Or so Delhi has apparently made known to the Mamata Banerjee government.
Sources in the Capital said that state finance secretary CM Bachhawat was given no promise of bailout funds from the Centre immediately. The finance secretary had been sent to follow up state finance minister Amit Mitra's visit last week.And several discussions in the North Block later, no decision on disbursement of funds was forthcoming.
Between June 20 and 22, the chief minister had gone to Delhi where she met Union finance minister Pranab Mukherjee, Prime Minister Manmohan Singh (who is chairman of the Planning Commission) and Planning Commission deputy chairman Montek Singh Ahluwalia.
She had then claimed a 47,000-crore special package for the state phased over four years. Insisting that Bengal should be considered a special case because it had had no development under the 34-year Left Front government which had now left it bankrupt, the chief minister had said after meeting the finance minister in Delhi, "Bengal should not be compared with other states." For the current financial year, Mamata had asked for 14,000 crore to recover from debt. The only amount spelt out was an enhanced plan outlay of 2,214 crore for 2011-12 against last year's 17,985 crore.
But sources said the "Bengal special case hasn't moved much" since then. "The ministry of finance had only promised to look into her claims. A month later, there is no assurance of bailout funds," a highly placed source in Delhi told TOI.
"Even if funds are allocated on special grounds like for the Aila devastation or development of Maoist-infested districts, all these proposals will have to be studied keenly and the process of disbursement in various categories would take months, or more than a year if at all," he said.
While in Delhi, the state finance secretary met Union expenditure secretary Sumit Bose, officials of the Planning Commission, and was made aware of the reality once and for all. Yet again, the state was asked to submit the consolidated fiscal roadmap which should indicate how the state would raise internal resources. The roadmap alone should reflect newer areas of revenue generation identified by the government and ways of addressing the system's deficiencies with regard to leakage of revenue and finally, raising resources by imposing taxes.
The source in Delhi said, "There isn't much scope of funding a state like the way the Bengal chief minister wants. Also, the ministry is not happy with the way the new government has been making announcements of schemes and projects in the last 65 days without taking the financial implications into account. None of these proposals could be implemented for want of funds." In the meetings in Delhi, it was pointed out that Bengal has done nothing so far to meet the parameters of the Fiscal Responsibility and Budget Management (FRBM) Act, effected in the state since July 2010.
The Union finance ministry has issued a written note to the state on the above issues. The source in Delhi said, "The ministry is aware that the state power department has not applied to the West Bengal Electricity Regulatory Commission for the revised tariff and is, thus, subjecting the exchequer to providing a 500 crore subsidy. Subsidy is not allowed under the FRBM Act."
On July 19, finance minister Amit Mitra and his department officials had gone through similar bouts of discourses by the department of expenditure. This came a day after the chief minister wrote to the prime minister seeking his intervention on allocation of funds for Bengal.
Even after repeated calls, the finance secretary was not available for comment.