MIL-OSI Asia-Pacific: West Bengal has performed well in social sector; however, High Debt to GSDP ratio and Low Base of Capital Expenditure matter of concern

By   /  July 15, 2018  /  Comments Off on MIL-OSI Asia-Pacific: West Bengal has performed well in social sector; however, High Debt to GSDP ratio and Low Base of Capital Expenditure matter of concern

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Source: Government of India

The Fifteenth Finance Commission of the Government of India is visiting the state of West Bengal from 16th to 18th July 2018. Ahead of the visit, Commission understood various aspects of its finances from Accountant General of West Bengal in New Delhi. The Commission will have meetings with Chief Minister, Ministers and other officials of the state. Detailed presentations will be made on the finances of the State Government. On 17th July, before the formal presentations by the State govt officials, Chairman Shri N.K. Singh will have one to one meeting with CM Ms. Mamata Banerjee. Commission will also visit IT Park in New Town, Kolkata, Madhyamgram Municipality and Kemia Khamarpara Gram Panchayat to understand their working and related issues.

 

West Bengal has made numerous achievements in socio-economic areas:

  1. Numerous schemes launched in the Social Sector
  2. Sanitation- First Open Defecation Free district in India was Nadia, WB
  3. Health- Institutional Deliveries have improved from 65% in 2010 to 96% in 2018. MMR and IMR of WB considerably better than National Average.
  4. Total Fertility Rate in the state is 1.6 which is lowest in India. Total 12 states have achieved the replacement level of fertility (2.1)
  5. Education- WB stands 1st in terms of enrolment of students and disbursement of scholarships.
  6. Agriculture- Exceptional Production in Pulses, Rice, Oilseed (Krishi Karman awarded 5 times in a row)
  7. Total Electrification in terms of HH coverage has increased from 55% (2011) to 99.81% (March,2018)
  8. Ease of Doing Business- Bengal amongst the top ranking states

However, the State faces numerous challenges:

  1. Huge Debt Liabilities
  2. High Interest Payment Obligations
  3. Historical Low Base of Capital Expenditure
  4. Limited Revenue Raising Capacity due to large informal economy and sectoral composition of State’s GSDP. (Contribution of Agriculture is 21.54% vs. all India avg of 15.40%)
  5. Huge Population Density
  6. International borders with Bangladesh, Bhutan and Nepal

The fiscal picture in West Bengal is characterised by a high Debt-GSDP ratio and a low own tax revenue-GSDP ratio. West Bengal has consistently had the high outstanding debt over the period FY 2000-01 to 2017-18(BE). West Bengal’s ratio of development expenditure to GSDP and Capital Outlay to GSDP has been one of the lowest amongst the General Category States. On the brighter side, Social Sector Expenditure to GSDP has been higher than the all state average. As per “Swachh Survekshan 2018” conducted by Ministry of Housing & Urban Affairs, GOI, West Bengal is home to 18 of the 25 dirtiest cities in the country. With regard to the State’s commitment towards SDG 1, still 19.98% of the total population is still below the Poverty line. Having the second highest population density after Bihar, this really poses a worrisome picture. ATC loss showing a declining trend though it is much above the permissible levels.

 

West Bengal is the fifth state to be visited by 15th Finance Commission from 16th to 18th July 2018

 

The Finance Commission needs to make an in-depth Study of the recent developments and future possibilities of economic growth and development of West Bengal. This will be based on the various interactions and meetings that the Commission is scheduled to have in West Bengal during its visit. The Commission led by the Chairman Shri N.K.Singh, Members – Shri Shaktikanta Das, Dr. Anoop Singh, Dr. Ashok Lahiri, Dr. Ramesh Chand and Secretary Shri Arvind Mehta along with other officials will also meet leaders of various political parties, Representatives of Trade and Industry. There will also be an interactive session with Urban Local Bodies and Panchayati Raj Institutions.

 

DSM/RM/AM

 

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