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Lot of keynes, less of key answers

John Maynard Keynes, Paul Samuelson and Milton Friedman and their theories on Thursday crowded out basic economics closer home in the Bengal Assembly when finance minister Amit Mitra rose to give his reply during the twelve-and-a-half hour discussion on the state budget.

Besides rolling out names of economists and testing MLAs’ knowledge of the subject, especially Opposition leader Surjya Kanta Mishra, Mitra also mildly launched an attack on the Centre for not helping the Mamata Banerjee government come out of the fiscal mess allegedly created by the Left Front.

While his 45-minute speech drew huge applause from the treasury benches and the Opposition members did not have much to say, some of the most pertinent questions about Bengal’s economy and its future remained unanswered

WHAT MITRA DIDN’T SAY

Sales tax show: Mitra claimed in his budget, placed on Monday, that Bengal achieved a revenue jump of 30 per cent in 2012-13, but his reply on Thursday did not mention anything about the failure in meeting the sales tax target that he had set himself while presenting the budget a year ago.

Mitra made no attempt to explain the “revenue buoyancy”, which he termed as “historic” in his budget speech earlier this week, though budget documents made it clear that the state gained from the recent hike in petroleum-product prices, imposition of entry tax and taxes on electricity duty. The reason behind the projection of just 22 per cent revenue growth — a slide from this year’s 30 per cent — for 2013-14 was also not explained

Myth over industrialisation: The state of affairs in industry, one of the biggest concerns of many in Bengal, did not find mention in Mitra’s response though his budget proposals talked about investment proposals worth over Rs 1.12 lakh crore. The number came as a surprise to many as Mamata Banerjee’s hands-off land policy has been cited by many as a major deterrent to Bengal’s industrialisation. The budget documents also captured the sordid state of industry in Bengal as it mentioned that 12 projects, involving Rs 312 crore, were catalysed in the last year. The number was significantly less than the past few years. When prodded for an explanation, industries minister Partha Chatterjee had said he hoped Mitra would explain the issue in his budget reply. Mitra belied Chatterjee’s hopes

Deficit demon: The silence of the economist-turned-politician, who in his earlier stint as the secretary-general of Ficci never missed an opportunity to lecture governments on the need to prune deficits, on deficit numbers came as a surprise. Mitra didn’t explain why the revenue deficit (difference between revenue receipts and revenue expenditure), an indicator of the health of an economy, rose sharply from Rs 6976.01 crore (2012-13 budget estimate) to Rs 13,308.10 crore (2012-13 revised estimate). The finance minister also did not give any justification on why he had projected a fall in the revenue deficit in 2013-14 to Rs 3488.49 crore despite the fiscal profligacy of the government

Employment enigma: Mitra had got a huge round of applause when he claimed that over 10 lakh jobs were created in 2012-13 and another 13 lakh would be added the next year. Several Opposition members had urged him to shed light on these numbers, but the focus on the Centre’s alleged apathy and debates over economic theories robbed them of the opportunity to get a detailed break-up

Inflationary impact: Raising the VAT rate at a time the state has a “regressive” local area entry tax would have an inflationary impact, Opposition leaders had said immediately after Mitra tabled the budget. While Mitra defended the decisions to raise VAT and retain entry tax, he was silent on how his government planned to tackle the menace of price rise