The Telegraph
Since 1st March, 1999
Email This Page

A budget, whether at the national level or the state level, is invariably a political as well as an economic exercise. But in the hands of some very adept persons it can become an exercise in dissembling. Take the case of Mr Asim Dasgupta, trained in economics at Presidency College, Calcutta, and MIT, Cambridge, and teacher of economics for many years before Writers’ Buildings claimed him. Mr Dasgupta made the “zero deficit” budget into a fine art bearing his own special seal. Then suddenly, a small deficit made its appearance in the budget. In the budget for 2003-04, Mr Dasgupta has declared the deficit to be a staggering Rs 793 crore. It is not unfair to assume, within the logic of fiscal policy, that over all those years when Mr Dasgupta was spinning the magic of “zero deficit’’, he was not allocating adequate funds for development. He may have thus done incalculable damage to the economy of West Bengal. To bypass such an allegation, Mr Dasgupta has constructed an ingenious explanation. He has said that he has shown this huge deficit in order to join the other states in a combined effort to pressurize the Central government to be more equitable in its allocation of resources. This argument is somewhat economical with the truth. Most states have in the past been showing huge deficits but this has in no way influenced the government in New Delhi. Mr Dasgupta is either living in self-induced delusion or is deliberately misleading people. Or perhaps, Mr Dasgupta is that unfortunate soul who believes his own propaganda.

Shorn of niceties and rhetoric, the deficit is easily explained. The government’s expenditure is increasing thanks to its addiction to populism and subsidies. There is also the burden of debt and interest repayments. The state revenues have not increased proportionately and neither have steps been taken to curtail expenditure. In the current budget, Mr Dasgupta proposes to raise extra revenues worth Rs 825 crore. The lion’s share of this will come from the entry tax which Mr Dasgupta has reimposed. This by any reckoning is a retrograde step. It is an obstacle to the free flow of goods. Moreover, West Bengal, in the national market, is a buyer and consumer. The net result of Mr Dasgupta’s entry tax will be a rise in prices of most things in West Bengal. Mr Dasgupta will have his extra revenue and will thus be able to wax eloquent in his next budget speech but the people of the state will be hard hit. The entry tax is the residual illusion of an illusionless man. All those who want to enter Mr Dasgupta’s economic raj are well advised to abandon all hope.

Email This Page