Calcutta, Oct. 18: The government has decided to raise another Rs 1,500 crore from the market at a time Bengal is lagging behind its tax revenue target.
The state finance department has got the green light from the Centre for raising the loan.
With this fresh round of borrowing, the government stands to exhaust 73.8 per cent of the enhanced borrowing limit for Bengal.
In the current fiscal, the Left Front government had made three borrowings between April and May and raised Rs 5,173 crore.
Mamata Banerjee and finance minister Amit Mitra had several meetings with Union finance minister Pranab Mukherjee before the Centre agreed to increase Bengal’s borrowing limit to Rs 20,534 crore from Rs 17,800 crore.
Finance department sources said the government had to go for a fresh borrowing programme because tax revenues have not been as buoyant as expected.
Although Mitra has spoken of revenue buoyancy, the reality proved to be different and the Mamata government had to fall back on the market to raise funds.
A finance department source said the target set for revenue generation was yet to be achieved.
“The target for increasing the revenue collection was set at 30 per cent more than the last fiscal. Till August-end, the figure stood at less than 19 per cent…. The government had fixed a target of collecting Rs 27,690 crore as tax for this fiscal,” said a senior finance department official.
The government stock will be sold through the Mumbai office of the Reserve Bank of India to banks, financial institutions and individuals. The bonds, carrying a 10-year tenure, can be redeemed on October 19, 2021. The interest rate will be decided during the auction to be held on Wednesday.
Between May 20 and now, the Mamata government had to borrow Rs 8,500 crore from the market. According to sources, the Bengal government has to spend around Rs 2,700 crore every month on salaries for its employees. The financial condition has not come in the way of the chief minister announcing new projects in Darjeeling and Jhargram.
“The loan will be utilised towards meeting the requirement for developmental expenditure of the state,” a finance department release said.
On August 6, the Centre had decided to release Rs 9,240 crore as central assistance and additional assistance to the cash-strapped Bengal government, prompting the chief minister to describe the Centre as “kana mama (blind uncle)”. After the latest round of borrowing, the state government can borrow another Rs 6,861 crore.
In the public meetings that Mamata addressed in the recent past, she had spoken of financial crisis the state was facing. “We are finding it difficult to pay salaries… Only we know how we are running the government,” Mamata said in Jalpaiguri’s Malbazar last week.
The government has also found it difficult to start repairing roads in most parts of the state.
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