The precarious financial condition of West Bengal again came to the fore when the state took a loan for the third time in this month, making it evident that it is struggling hard to negotiate the expenses caused by the social schemes launched by Chief Minister Mamata Banerjee.
According to a statement issued by the Reserve Bank of India, the state borrowed Rs 3,000 crore from the open market on Monday – the third time in this month taking the total borrowing to Rs 6,500 crore this month – making it second after Uttar Pradesh to borrow such a huge amount from the market. Earlier the state had borrowed Rs 3,500 crore in two instalments in this month.
The RBI statement said that altogether 14 states borrowed a total of Rs 24,639 crore from the open market on Monday. Uttar Pradesh borrowed Rs 5,000 crore – making the state have the highest borrowing from the market.
On January 18, 12 states borrowed a total of Rs 20,659 crore from the market. Of these 12, West Bengal took another loan of Rs 1,000 crore. Uttar Pradesh that borrowed Rs 3,000 crore was the highest borrower. On January 6, the West Bengal government borrowed Rs 2,500 crore from the market – the maximum out of the nine states that borrowed from the market.
Last month, the West Bengal government twice borrowed from the open market. On December 14, seven states borrowed a total of Rs 7,053 crore from the market. Of these seven states, West Bengal was the highest borrower with Rs 2,500 crore. On December 24, a total of 16 states borrowed a total of Rs 22,984 crore from the market. In this case too, West Bengal had the highest amount of Rs 4,000 crore. This means that from December 14 to January 24, the West Bengal government borrowed a total of Rs 13,000 crore from the open market.
In the period between April 2020 to December 2020 when its revenue plummeted to all time low because of the pandemic situation and the consequent lockdown, the state raised around Rs 35,000 crore from the market but during the current financial year between April 2021 to December 2021, it went for a market borrowing of Rs 52,500 crore. During the same period in 2019 the state borrowed Rs 28,000 crore via the State Development Loan.
According to experts with revenue generation going down, multiple market borrowings have now become the essential compulsion of the West Bengal government now to meet its recurring expenses. The experts are of opinion that the state is struggling with the non-plan expenditure mostly to meet the promises made by Chief Minister during her election campaign.
Incidentally, when the 34-year rule of the Left Front came to an end in 2011 and Banerjee became the Chief Minister, the accumulated debt of the state was Rs 1.93 lakh crore. But, according to the state government’s budget figures, the accumulated debt is likely to go upto Rs 5.5 lakh crore by the end of the 2020-21 financial year.