The Telegraph
Since 1st March, 1999
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UK pat with pointer to sorry fiscal state
- DFID ready with assistance, if govt knows how to use it

Calcutta, July 23: The British development aid agency, Department for International Development (DFID), is awaiting the governments’ response to its offer of budgetary support.

On his first official visit to the city, the agency’s permanent secretary, Suma Chakrabarti, said the state is in talks with the Centre regarding the DFID assistance.

DFID is involved in several projects in Bengal but its budgetary support will give the state government freedom to decide how it wants to spend the money.

“In recent years, there has been a significant deterioration in the fiscal situation in Bengal. The current (revenue) receipts of the government are not enough to meet even the committed expenditure (towards interest payment, salaries and pension), making the fiscal position vulnerable. The unfavourable fiscal position is squeezing out the government’s pro-poor and development expenditure… and that is likely to threaten the progress of poverty reduction in the long term,” a DFID official said.

However, Chakrabarti was all praise for the chief minister. Bengal has progressed on several fronts in the past few years, he said, adding that there is need to “advertise these achievements”.

Allaying “fears” that the Centre would send portions of the DFID grant to the state as loan, Chakrabarti said all the money would come to Bengal as grant. “Our policy is that all our funds are grants and must be used as such and that has been discussed with the central government,” Chakrabarti said.

Delhi had recently told the state that portions of the Rs 700 crore for the Calcutta Urban Services for the Poor (CUSP) programme would be sent as a loan and the remaining as grant.

Buddhadeb Bhattacharjee had sorted out the confusion with the Centre but state government officials were not certain whether funds for all future programmes would come as grant.

Chakrabarti said DFID had given £9 million to Bengal in 2002-2003 and £19 million last fiscal. “It is likely to be increased further — £32 million in 2004-2005 and (that) could increase to around £60 million by 2006-2007.” However, that would depend on the money the government is able to utilise for development programmes.

“The state government is committed to reforms and the chief minister today again assured us about it. The reason we are interested in offering our support to this government is because we know they are on the right trajectory and on the reforms path,” the DFID official said.

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