How Bengal Government’s Spendthrift Ways Virtually Disqualify It From Receiving The Financial Packages It Demands 

Over the past few weeks, Bengal chief minister Mamata Banerjee and her finance minister Amit Mitra have been protesting the Union Government’s refusal to accede to the state’s demand for Rs 53,000 crore that is claimed to be due to it.

Bengal had also demanded a largesse--a special financial package--amounting to “at least” Rs 25,000 crore to fight the pandemic. Banerjee voiced this demand more than a month ago, and has been repeating it ever since.

In late March, she had demanded Rs 1500 crore as a special financial package and within two weeks, she scaled this demand by more than 16 times. She did not provide any break up of the amount, and nor did she provide any justification for it.

Banerjee had only said that the special financial package she was asking for would “help the unorganised sector during the lockdown”. This, say those who have knowledge of how Bengal manages its finances, means large doles to party faithfuls.

Bengal’s demand for special financial packages has never evoked a sympathetic response for the simple reason that it is profligate with the little resources that it has. And this profligacy is only for political gains.

At a time when all states are tightening their belts, the Bengal government is splurging huge sums of money on propaganda and undeserved doles to ‘clubs’.

Local newspapers and news channels are replete with advertisements everyday highlighting the ‘achievements’ of the Trinamool government, and Banerjee features prominently in all these advertisements.

While official figures are unavailable, a rough estimate reveals that the Bengal government shells out anything between Rs 50 crore to Rs 100 crore on such advertisements in the print and electronic media. Some estimates put the figure much higher.

But what this wasteful expenditure ensures for the party in power and its supremo is favourable media coverage.

As is well known, almost all local newspapers and TV channels provide glowing coverage to the Trinamool and its chief and there is barely any criticism of the innumerable acts of omission and commission of the state government.

Chief Minister Banerjee, while complaining of an acute shortage of funds to fight the pandemic, has been exceptionally generous to the 30,000-odd clubs that yield rich political returns for her.

A couple of weeks ago, she reportedly sanctioned a grant of Rs one lakh to many clubs all across the state. The state government has refused to reveal how many clubs got this generous grant.

The matter would have remained hidden but for an expose by a local news channel by the name of Arambagh TV which beamed images of cheques of Rs one lakh each being distributed from a police station in Arambagh subdivision of Hooghly district to representatives of ‘clubs’.

The TV channel had reported that some of the 59 clubs which got the generous dole were fake. The owner of the TV channel has been booked by the police (read this).

On 13 March this year, the Bengal government doled out more than Rs 1,300 crore to various clubs across the state. This was done in the name of promoting sports in the state.

These clubs are locally influential and have ensured that people in the areas they are located in, especially rural and semi-urban areas of the state, vote for the Trinamool. They employ various tactics ranging from enticements, threats and even violence to make people fall in line with the diktats of the ruling party.

Mamata Banerjee realised the importance of these clubs, which proliferated during Left rule in Bengal, to establish and maintain stranglehold on people of the state.

In 2012, a year after coming to power, she started the practice of regular doles to these clubs. She had then given Rs two lakh each to 26,000 clubs.

Since then, these clubs have received Rs one lakh each every three years. New clubs get Rs two lakh each initially. Banerjee also started giving out doles to 28,000 clubs for organising Durga Pujas. In 2018, she gave Rs 10,000 each to these clubs, and the amount was hiked to Rs 25,000 last year.

Apart from these, there are many other handouts to various individuals and organisations in the name of organising sports, cultural and social events (see this).

Banerjee also gives out huge grants to many community ‘development boards’ that she has constituted to shore up support among these communities, mostly belonging to scheduled tribes and castes.

There is little accountability on how the clubs and other organisations who get these generous grants spend the money. “All they have to do is work for the Trinamool and ensure support for that party, especially during elections,” said BJP national secretary Rahul Sinha.

The latest dole of Rs one lakh to the clubs is learnt to be in addition to the money they got in March this year. “Perhaps the chief minister realised that resentment is brewing against her all over the state for her mishandling of the pandemic and she is now desperate to curb criticism and ensure people keep on supporting her. That’s why the latest doles,” said a senior BJP leader.

The chief minister announced an ad hoc bonus and festival advance for government employees earlier this week. This, say public finance experts, is an unnecessary and wasteful expenditure at a time when all states are cutting down on expenses.

Banerjee said that the ad hoc festival bonus (for Eid later this month and Durga Pujas in October) was being hiked from last year’s Rs 4000 to Rs 4200. The eligibility criterion for this bonus has also been relaxed: the salary ceiling for all those who will get this bonus has been raised. The chief minister also announced an enhanced festival advance.

All this will cost the state exchequer an additional Rs 400 crore, double the amount of Rs 200 crore she had sanctioned for the state’s ‘covid fund’.

Her misplaced generosity during such a serious pandemic has triggered a storm of criticism and has led many to question her demand for more central funds.

“If she has money to waste to clubs, in giving bonuses and on advertisements and other propaganda, what does she need a financial package from the Union Government for? If she gets more money, she will misuse it to further her political objectives. She will not utilise any financial package judiciously to improve Bengal’s dismal health infrastructure or the grossly deficient healthcare delivery systems and will, instead, waste it all,” said state BJP chief Dilip Ghosh.

Bengal's finances are in a mess. It is one of the most debt stressed states in the country and its loan burden at present is over Rs 4.5lakh crore, more than double the Rs 1.93 lakh crore debt burden of 2011, when Banerjee assumed office.

Bengal has been borrowing heavily not only to service its debt, but also to splurge on politically-motivated schemes and projects.

It now wants leeway to borrow more and has been demanding that the Fiscal Responsibility & Budget management (FRBM) limit for borrowings be raised from 3 per cent of the GSDP to 5 per cent. The Union Government has not given its approval for this.

The state government’s demand for more funds citing the pandemic is, say many, just a ploy to continue its profligacy and wasteful spending. “No other state is being financially irresponsible as Bengal, and that is why it does not deserve a financial package,” said the BJP leader.