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Support for Bengal case

Bimal Jalan (left) in Calcutta on Monday. Picture by Kishor Roy Chowdhury

Calcutta, April 14: Former RBI governor Bimal Jalan today said he supported Bengal’s demand for a moratorium on interest payments on its past loans.

“I am all for more central assistance to Bengal,” Jalan today said on the sidelines of an interactive session of the MCC Chamber of Commerce and Industry here.

Besides the RBI governorship, Jalan had been the chief economic adviser, banking secretary, finance secretary and a member of the Planning Commission.

He added that the central government had earlier provided relief to states during moments of crisis such as drought or security issues.

Bengal has been seeking a moratorium on interest payment ever since the Trinamul Congress came to power three years ago.

Chief minister Mamata Banerjee had said that the state had to pay over Rs 25,000 crore a year as interest to the Centre, which was hurting the government’s ability to undertake development.

The central government, however, had not accepted the state’s demand, saying a support to a particular state will lead to charges of favouritism.

Jalan said there was a need to review the Centre-state relationship so that greater resources flow to the states.

“Ultimately there has to be a fair and accountable division of total resources among states,” he said, adding that the decision has to be taken by the finance commission.

The Bengal government in November last month had demanded Rs 2.55 lakh crore from the 14th finance commission for development.

Bad loans

Speaking on rising non performing assets in the banking sector, Jalan said it was partly due to the economic slowdown. But he said it did not completely explain the Rs 2.4 lakh crore bad assets in various banks at the end of December last year.

 
 
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