The Telegraph
Thursday , May 3 , 2012
Since 1st March, 1999
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A new government came to power in West Bengal after over three decades of Left rule with the promise of bringing in parivartan (change). The ‘change’, it is being alleged, is manifest in the form of paranoia and intolerance against any kind of dissent. Can we really blame the Mamata Banerjee government for this? Banerjee’s agenda was to dislodge the Left Front government. She never spelt out her alternative development agenda. The electorate was aware of this and voted her to power. Pointing fingers at her now is grossly unfair.

The Left Front had committed a series of blunders, particularly in Singur and Nandigram. Ironically, Singur and Nandigram were honest attempts by the Left Front to attract private investment. The strategy, unfortunately, backfired because of the mishandling of the situation on the ground. The arrogance of some Left leaders was also responsible for the setback. Banerjee had capitalized on this situation.

The real question is this: can West Bengal grow without a development agenda? Rhetoric won’t take us too far and some hard facts need to be addressed. West Bengal’s economy is in a bad shape. Serious doubts can be raised about the quality of state-level income data as well. If West Bengal’s per capita income is growing at more than 6 per cent annually, how can there be such distress induced out migration from rural Bengal? West Bengal is also infamous as a supplier of unskilled manual labour — maids, rag-pickers, and so on — to cities like Delhi, Mumbai and Bangalore. The myth of rural prosperity as a result of land reform and decentralization needs to be busted. Bengal’s fiscal situation is perhaps the worst in the country, with high government borrowing and the accumulation of a huge debt. In terms of tax effort, the state ranks at the bottom. It also has a very low level of public spending.

To be fair to Banerjee, she is having to bear the burden of past profligacies. But one would have expected efforts to be directed towards the reversal of these trends by reforming administration and governance and generating higher revenue. That does not seem to be happening. The government is, instead, lobbying for a bail out from the Centre.

Huge allocations have been made through Centrally-sponsored schemes in recent years. In many cases, the state has not been able to utilize these funds effectively. The Thirteenth Finance Commission has issued a relaxed norm for fiscal correction for West Bengal, Kerala and Punjab. This gives breathing space to the state for fiscal adjustment. The urgent need is to undertake fiscal correction and to tread the fiscal reforms path proposed by the Commission. Else, the state will lose various grants contingent upon its adherence to the fiscal restructuring path. Asking for a Central package is the most convenient option. But this also means that national tax payers would have to pay for the inefficiency and profligacy of a particular state. Is this fair to other states or to national tax payers? It may be pertinent to look at what Nitish Kumar did in Bihar. When he took over Bihar’s reins, the economy was in a shambles. But effective policy intervention and good governance have made a difference. Bihar’s per capita income is growing at more than 10 per cent annually since 2007-08.

West Bengal was ranked as one of the leading states in the country in terms of social and economic achievements in the first two decades after Independence. But it gave up on growth as a result of political bickering, the politicization of society and education, deplorable health infrastructure and corruption. A state without an agenda for development is a recipe for anarchy. One can only hope that the government will engage in development activities.