Asim dubs Amit’s budget ‘incomplete’
Mamata Banerjee gave 100 out of 10 to Amit Mitra for presenting a “stable budget” without adding any fresh burden on the common man despite the problems — ranging from high debt burden to lack of support from the Centre — facing the Bengal economy.
Former finance minister Asim Dasgupta — a veteran of around 30 budgets and votes-on-account — on Saturday termed Mitra’s budget proposals “incomplete and uncertain” during a news conference at the CPIM’s headquarters at Alimuddin Street.
The PhD in economics from the Massachusetts Institute of Technology (MIT) divided his criticism of Mitra’s maiden full budget into two sections — first, he sought explanations on proposals in the Trinamul government’s first budget and then tried to drill holes into some claims made by Mitra and Mamata about the Left’s mismanagement of Bengal economy.
POSERS FOR MITRA
Missing mop-up target
Dasgupta’s demand: Mitra needs to explain why he failed to meet his tax revenue targets and the basis behind his projection of a 25 per cent rise in collections in 2012-13.
Background: Against a target of Rs 27,690 crore and a 30 per cent growth in collections, the revised estimates for 2011-12 show that Mitra’s mop-up has been Rs 24,934 crore, a mere 18 per cent rise, while the Left had achieved a 25 per cent growth in tax collections. “Figures available on the revenue collections of other states suggest that till December 2011, the growth in revenue collection has been in the range of 22 to 23 per cent,” said Dasgupta.
Break up of higher earning
Dasgupta’s demand: Mitra has to explain how he proposes to earn Rs 200 crore extra through his tax measures in which he has given some exemptions, increased rates in some categories and introduced a new tax.
Background: Mitra mentioned in his budget speech that the government will earn Rs 200 crore extra. In his tax proposals, Mitra raised the limit for professional taxes besides making some products like paneer, sticks used to make kites and packing boxes cheaper by slashing or abolishing taxes. He also raised tax rates on a few luxury items by 1 per cent and introduced entry tax. “He should answer how much he will lose because of exemptions and how much he will earn from each of the proposed raises,” said Dasgupta.
Details on entry tax
Dasgupta’s demand: Mitra needs to provide details of what he meant by local area entry tax.
Background: The finance minister proposed to introduce a new bill to levy tax on entry of goods into local areas to create a Compensatory Entry Tax Fund with the objective of facilitating industry and trade. The absence of the applicable rate and the definition of local area created confusion amid fears of rising prices and corruption at collection points. “We had abolished entry tax in 1995 because of its regressive nature. He has to explain his plans about its reintroduction,” said Dasgupta.
Arithmetic on allocations
Dasgupta’s demand: Mitra has to explain the reason behind minimal or no increase in plan allocation in key areas such as minor irrigation, irrigation and waterways, small-scale industries, rural development, western region development and land and land reforms.
Background: Some departments such as power, youth services, minority affairs and madrasah education were promised significant higher plan allocation in Mitra’s budget. Dasgupta hailed the generous allocations for these departments but wondered why the finance minister was miserly in his allocations to some key departments.
Opaque employment generation claim
Dasgupta’s demand: The finance minister has to explain why his promise of around 11 lakh jobs was not mentioned in the budget speech.
Background: Mitra sought the Speaker’s permission yesterday to announce that his proposals will create around 11 lakh jobs but the promise did not feature in his budget speech. Dasgupta recounted how he scrupulously referred to job creation potential of different schemes in his budget proposals. “The large sample NSSO survey of 2009-10 has shown that in terms of daily employment opportunities, job creation in Bengal grew at 7.2 per cent per annum between 1999-2000 and 2009-10, which was higher than the national average of 4.2 per cent,” said Dasgupta.
Need for actual figures
Demand: The finance minister needs to explain how many teachers have actually joined before claiming about creation of 44,000 teaching jobs. He also needs to explain how much of Rs 80,000-crore investment proposals have materialised.
Background: In his budget speech, Mitra referred to the government’s achievements in creation of jobs in the government and private sectors.
Rebuttal of claims by Mitra and Mamata
Claim: Bengal has the highest debt burden and each child is born with a debt of Rs 21,000.
Rebuttal: Per capita debt is not the proper measure to compare indebtedness of states. Even if it is used, Bengal is 12th among major states as the per capita debt burden is much higher in Punjab (Rs 26,000), Gujarat (Rs 22,000). Per capita debt burden for an Indian is Rs 32,321.
Claim: Bengal has to pay Rs 22,000 crore each year — the highest in the country — as interest and repayment of past debt.
Rebuttal: One cannot crib about paying interest and repaying parts of the principal as this is the norm. Maharashtra has been paying interest of Rs 16,000 crore every year.
Claim: The Left government did not enact the fiscal responsibility and budget management (FRBM) act on time. They did it in 2010-11 only to make borrowings difficult for the next government.
Rebuttal: Till the time of the 12th finance commission, enactment of FRBM would not have resulted in any gain for Bengal. The state enacted in the first year of the 13th finance commission as the rate of interest on small savings loan was reduced and the flow of central grants were tied to it. “We did not fight the election thinking that we will lose,” added Dasgupta.
Claim: The closing balance on March 31, 2011 was negative, which meant that the Left government had left a burden of Rs 2838.01 crore — mentioned in the annual financial statement in August — on the next government. Mitra had referred to this amount as unpaid bills during a news conference.
Rebuttal: The budget document tabled yesterday does not mention any negative balance and instead shows a surplus of Rs 169.24 crore in the actual figures of 2010-11. “This government’s earlier financial calculations were based on this negative balance, but finally, it has emerged that there was a net gain of Rs 3,007.25 crore (Rs 2,838.01+Rs 169.24) crore,” said Dasgupta.
Courtesy: The Telegraph
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