The West Bengal government has received a reprieve in the form of a Rs 878 crore dole from the Centre. The state may argue this is not a dole and is rightfully its due. It is difficult to accept this argument. Not only will the interest rate charged be 7 to 8 per cent, as against the normal 13 to 14 per cent, interest will only have to be paid until recommendations of the 12th finance commission surface next year. And coupled with the recommendations of the commission, the principal will not have to be repaid. If Mr Asim Dasgupta believes that 7 to 8 per cent is the right lending rate, he should accept that a deposit rate must be lower. However, the Left Front has not been vociferous in demanding a lowering of interest rates on small savings. West Bengalís finances are worse than many other states and the Reserve Bank of Indiaís analysis of state government finances in the Nineties documents this. West Bengalís debt grew at an annual average rate of 19 per cent, with only Himachal Pradesh and Orissa exhibiting a faster rate of increase. In contrast, revenue grew at an annual rate of 12.4 per cent, with lower figures registered only by Bihar and Mizoram. The RBI also measures what it calls fiscal markmanship, the deviation of budget estimates from revised estimates and eventual actuals.
West Bengalís deviations are significant. Comptroller and auditor general reports have also highlighted non-adherence to budgetary norms and disciplines and complete non-transparency. Squeezed by pressure of salary payments to government employees, the state has done nothing to downsize government or reduce subsidies to loss-making state enterprises and hike user charges. Instead, it has slashed expenditure on social sectors and physical infrastructure (like roads). Loans from the World Bank and the Asian Development Bank have not been utilized because the state is unable to come up with matching grants. This does not bother the government and the state of West Bengalís citizens did not trigger the search for a bailout. The government became jittery because of an inability to pay salaries and bonuses to government employees on the eve of the festive season. The expenditure reduction programme now underway is no more than token. Cars, telephones, travel, medical bills, bouquets ó the chief minister must be joking. Kerala, the other left bastion, offers directions for genuine reform. So do Andhra Pradesh, Karnataka and Rajasthan. Unfortunately, as long as the Left Front government is around, West Bengal will continue to be bracketed with Bihar and Orissa. Restoration of the old Bengal presidency is what 25 years of left rule has achieved.