Largescale Leakage Of Public Money In Bengal Is The Reason Union Government Is Reluctant To Give State More Funds

Jaideep Mazumdar

Apr 19, 2022, 07:21 PM | Updated 07:21 PM IST

Bengal Chief Minister Mamata Banerjee.
Bengal Chief Minister Mamata Banerjee.
  • Largescale leakage of funds meant for development, social welfare and relief in Bengal has led to successive Union governments being wary of wholeheartedly conceding Bengal’s demand for funds.
  • Bengal Chief Minister Mamata Banerjee has been crying hoarse over alleged non-receipt of the state’s due share of funds, including that meant for relief in cases of natural disasters, from the Union government. She has never tired herself of charging New Delhi with harbouring a ‘step-motherly attitude’ towards Bengal.

    But the truth lies elsewhere. Largescale leakage of funds meant for development, social welfare and relief in Bengal has led to successive Union governments being wary of wholeheartedly conceding Bengal’s demand for funds. This is more so in the case of relief funds whose spending cannot be meticulously audited.

    Allegations about largescale misuse of relief funds, and selective distribution of relief to only those faithful to the ruling party, has dogged Bengal since the Left Front rule of the state. The opposition — it was the Congress and the Trinamool Congress during Left rule and the BJP and the CPI(M) now — has been consistently alleging that the huge sums of money given to the state for relief works had been misappropriated by ruling party functionaries and there has always been widespread and blatant discrimination in distributing the little that’s left (after the siphoning off) to beneficiaries.

    The ruling party — the Left earlier and the Trinamool now — has, of course, always vociferously denied the charges and has always demanded much more than what New Delhi has been allocating to it.

    But the loud denials have found few takers. And now, the Comptroller and Auditor General (CAG) had officially endorsed the allegation. A recent audit by the CAG into distribution of relief after Cyclone Amphan that struck Bengal (and neighbouring Odisha as well as Bangladesh) in May 2020 has revealed “a very large number of irregularities”.

    The CAG audit was ordered by the Calcutta High Court after a clutch of public interest litigations (PILs) alleging widespread corruption and favouritism in distribution of relief to the cyclone-affected people. The PILs alleged that the money for the relief, as well as relief materials, went to those close to the ruling party and many of the recipients were not affected by the cyclone.

    Also, the state government was charged with publishing a false list of beneficiaries. The High Court, while asking the CAG to carry out a “thorough and impartial investigation”, also asked the federal auditor to find out who all got the relief and if they were affected by the cyclone. It also asked the CAG to fix responsibility for lapses.

    The CAG report not only red-flags largescale anomalies in distribution of relief — primarily the Rs 2,000 crore given by the Union government to the state for the cyclone-affected to rebuild or repair their homes — but also states that the Bengal government did not cooperate with the auditors and created hurdles for them.

    The CAG report states that “there were a very large number of irregularities which show that not only the selection of beneficiaries was non-transparent, but the relief was also distributed in an unfair method and there was high risk of fraud in the payment of relief”. The CAG has submitted its report to the Union Home Ministry and recommended a thorough investigation into the process of disbursement of relief and fixing responsibility on government officials who allowed the anomalies.

    The CAG audit cited instances of anomalies. For instance, it revealed that over Rs 94 lakh was paid to about 1,500 people for rebuilding or repairing their houses despite their claims about their houses being damaged by the cyclone being rejected by the state government itself.

    This CAG report has only exposed what many say is just the tip of the iceberg. After every natural disaster, it has become the standard practice of the Bengal government (the Left earlier and the Trinamool now) to grossly inflate damages and demand astronomical sums of money for relief and then raise a hue and cry when the Union government releases a fraction of the sum demanded based on reasonable assessments of the damages.

    In the case of Cyclone Amphan, for instance, the Bengal government put the total loss caused by the cyclone at Rs 1 lakh crore. The Union government, understandably, did not accept this grossly inflated figure and gave only a fraction of it to Bengal. Immediately after the cyclone, the Union government gave Bengal Rs 1,000 crore, and an additional Rs 2,707.8 crore in November that year. In addition to that, Bengal got the lion’s share of the Rs 4,381 crore disbursed to six disaster-struck states.

    But Bengal said it wasn’t enough and claimed it had already spent Rs 6,350 crore for cyclone relief from its own coffers. Perhaps realising that its estimate of damages wreaked by Amphan (Rs 1 lakh crore) was grossly exaggerated, the state government brought down the figure to Rs 35,000 crore.

    Chief Minister Mamata Banerjee was incensed by the Union government ignoring her claims and dubbed it as another instance of ‘step-motherly treatment’ of Bengal by the Centre, a bogey that has been raised ad nauseum since the Left came to power in the state in 1977.

    Top bureaucrats explained to Swarajya that it is relatively easy to syphon off funds meant for disaster relief and reconstruction. “There is great urgency in distributing relief when a disaster strikes and proper procedures cannot be adhered to while purchasing relief and other materials from the market. Most of the beneficiaries are poor and from remote areas, and that precludes a proper audit. The beneficiaries are also very vulnerable, and in the case of Bengal, dependent a lot on the patronage of local ruling party politicians. Hence, they do not protest even when they get meagre relief,” said a senior IAS officer who did not want to be named for obvious reasons.

    That is why, he added, states like Bengal submit grossly exaggerated estimates of damages caused by natural disasters. “They then hope that the Union government will accept at least 50 to 60 per cent of their estimates and disburse funds accordingly. But even that 50 or 60 per cent is often a few times the actual quantum of damage and that leaves enough room for ruling party functionaries and low-ranking officials to syphon off a good portion of the relief money,” the officer said.

    Also, in a state like Bengal where the masses — rural and urban — are in the grip of ruling party politicians, complaints or protests over meagre, unfair or selective distribution of relief is rare. “In other states, people denied relief or discriminated against will protest vociferously. The people of Bengal who live under the control of local politicians seldom dare to complain and so anomalies, discrimination and corruption in disbrusement of relief does not come to light,” the officer added.

    In the case of Amphan relief, so widespread were the anomalies that even Union Home Minister Amit Shah accused the Banerjee government of swindling relief funds. He accused Banerjee’s nephew Abhishek and other Trinamool netas of misappropriating the Rs 10,000 crore given by the Centre to the state government as Amphan relief.

    This misappropriation of funds provided to Bengal by the Union government is not limited to disaster relief only. Many allegations are routinely levelled about funds meant for infrastructure and other development projects, as well for social welfare schemes, being misused and misappropriated.

    It has also become a regular practice by the Bengal government, especially the present one, to divert funds meant for specific heads to pay salaries to employees or doles to clubs and others. Bengal, a cash-strapped state that is deeply in the red, just doesn’t have enough money of its own to fund the many doles that Chief Minister Banerjee has been announcing for women, unemployed, clubs and others. That is why it routinely diverts funds meant for development for these handouts that keep Banerjee in power.

    Bengal also flouts financial norms and good practices. Rarely does it submit utilisation certificates for funds it receives under various development and welfare heads from the Centre. That holds up subsequent disbursal of funds, and the state then politicises it by alleging ‘step-motherly treatment’ of Bengal.

    This is why successive Union governments have been quite circumspect in releasing funds to Bengal. Opacity in spending, largescale allegations of corruption and discrimination, and many other anomalies cloud spending of public funds by the Bengal government. New Delhi, understandably, is reluctant to fund this loot.

    Jaideep Mazumdar is an associate editor at Swarajya.

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