The make-believe world of West Bengalís finance minister, Mr Asim Dasgupta, has finally come unstuck. For a long time he had taken the state for a ride through his zero-deficit budgets and empty rhetoric. There is something pathetic, therefore, about his latest attempt at financial fire-fighting. In announcing a slew of measures to reduce expenditure and thereby raise an additional Rs 750 crore, he has reacted to a desperate situation in a rather pedestrian manner. It is baffling why the measures he has now announced to cut down revenue expenditure had not been taken earlier. Government departments, as much in West Bengal as elsewhere, are notorious for wasteful expenditure. One would assume that a state government whose revenue earnings are less than its expenditure would be particularly anxious to trim its spending. Mr Dasgupta could not have been unaware of last yearís report of the comptroller and auditor general of India which presented a gloomy picture of the stateís finances. Between 1996 and 2000, the report noted, the stateís revenue receipts grew at an annual average of 15.3 per cent, while the expenditure grew at 22.6 per cent. The only explanation for Mr Dasguptaís strange inaction seems to be that he was still trying to clutch at his unreal world. His brinkmanship has pushed the state to the kind of insolvency typified by Bihar.
No one is impressed anymore by Mr Dasguptaís attempts to lay the blame for West Bengalís financial mess at New Delhiís door. The simple truth is that the state has failed to earn enough to meet its expenses. Reports by the planning commission, the Reserve Bank of India and the CAG rang the warning bells which he declined to hear. The result has been a disastrous slowdown in resource mobilization, in which West Bengalís record during the Nineties had been better than that of only Bihar and Mizoram. The other catastrophic consequence has been the debt-trap into which the state has slipped. During the same period, West Bengalís indebtedness grew by 19 per cent. Only Orissa and Himachal Pradesh fared worse on this count. Even loans taken at high interest rates were used to meet routine government expenses, and not for development projects. It should be small comfort that the state has earned some reprieve from the Centreís latest grant of Rs 878 crore, of which the loan component has also come at a reduced interest rate. But nothing can mend matters unless Mr Dasgupta gives up play-acting. Cutting down expenditure is not enough; he has to collect revenues large enough for development planning, even if by unpopular means.