New Delhi: Union Finance Minister Pranab Mukherjee and West Bengal Finance Minister Amit Mitra on Tuesday discussed a financial package to help the eastern state to tide over its financial problem and the meeting will continue on Wednesday.
"We will meet again tomorrow," Mitra told after a long meeting with the Union Finance Minister that lasted for more than an hour but remained inconclusive.
The two leaders are reported to have deliberated on a financial package that would help the Trinamool Congress-led government to tide over the financial problems it inherited from the Left Front administration.
Mukherjee had earlier said that the union government was trying to work out a package to provide necessary support to the state.
Mukherjee had said that Chief Minister Mamata Banerjee, who has inherited fiscal problems from Left Front's governance of over three decades, "requires accommodation" and the Centre was ready for that.
West Bengal has a very low Tax-GSDP ratio of 4.5 per cent compared to 16 per cent in case of Karnataka and 11 per cent of Andhra Pradesh.
Since West Bengal did not enact a Fiscal Responsibility and Budget Management Act (FRBM) for long, it relied heavily on borrowings and also it did not get the full benefit of the Finance Commission's devolution formula for sharing of taxes.
Its dependence on small savings, NSS funds, which had to be returned, has put a heavy burden on the state leading to a massive debt. Per capita debt in the state was the highest in the country.
Prime Minister Manmohan Singh, according to Mukherjee, had earlier suggested that West Bengal's requirement could be over Rs 12,000 to bridge the gap on account of deficit (about Rs 8000 crore) and other reasons.
The calculation sheet shows that every month the state's estimated expenditure to estimated income gap would be Rs 1,545 crore. The total expenditure on salary and allowances is Rs 639 crore. The gap looks like going up to Rs 19,000,
Mukherjee had said.
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