Tag: revenue

The revival of Bengal’s Public Finances

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West Bengal has gone through a significant transformation with the public finances. The state of the public finances was in a dilapidated condition when Mamata Banerjee took over as the Chief Minister of West Bengal.

Figures clearly show that the State’s fiscal measures have borne fruit:

  • Revenue Deficit (difference between budgeted net revenue and actual net revenue) which was 3.6% (2010-11) has declined over the years. It was 2.7% (2011-12) to 2.1% (2012-13) and is projected at 0.5% (2013-14). The Revenue Deficit has sharply fallen from Rs 21,578 crore (2009-10) to Rs 13,308 crore (2012-13) and to Rs 3,488 crore (2013-14).
  •  Gross Fiscal Deficit (difference between government’s expenditure and revenue expressed as a percentage of GDP/GSDP) which was 4.4% (2010-11) has also declined over the years. It was 3.3 % (2011-12) and in 2013-14, it is projected at 1.8%. In the non special category states, in terms of Gross Fiscal Deficit, West Bengal had second highest GFD (2011-12), while in 2013-14, 6 states are above WB.
  • The state’s own tax collection has increased historically. It was at Rs 22,000 crore (2011-12) and increased by more than 40% in 2012-13 and to Rs 39,100 crore (2013-14).
  • Capital Expenditure Disbursement (it is the expenditure on development of machinery, equipment, building and other infrastructure) a greater growth of infrastructure like roads, bridges etc) grew by 44% in 2012-13, from Rs 10,505 crore (2011-12) to Rs 15,137 crore (2012-13) and further to Rs 18,914 crore (2013-14).
  • The ‘Development Expenditure’ (as defined by RBI) has increased from 52% (2011-12) to 57% (2012-13 and 2013-14).
  • The ratio of own revenue generation to the revenue expenditure has significantly increased from 35.8% (2011-12) to 39.8% (2012-13) and to 45.2% (2013-14).

 

Note: The figures of 2010-11 and 2011-12 are actual figures while figures of 2012-13 are Revised Estimates and 2013-14 are Budget Estimates.

Source of data: RBI publications and State Budgets.

Economic growth: Bengal shows the way

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When the new Government came to power in West Bengal in 2011, the fiscal condition of the State was in disarray. There was a huge debt burden of about Rs 2 lakh crores and the GSDP growth rate was way below national average.

However, in the last three years, there has been a remarkable improvement on the economic front. There has been a turn of fortune for Bengal’s economy under the leadership of Ms Mamata Banerjee.

West Bengal was able to raise its tax collection during a period of economic downturn and reduced profit margins for companies because of its e-governance efforts. By making every registered dealer who has to pay tax worth Rs 2 Lakh or more to make payments only electronically, government has succeeded in increasing compliance and there by plugging out possible channels of leakages.

The numbers say it all:

  • The State revenue has gone up historically from around Rs 21,000 crore annually to around Rs 39,000 crore annually.
  • In FY 2013-14, GSDP growth  rate was 7.7%  vs national average of GDP : 4.9%
  • In FY 2013-14, growth in agriculture and allied sector was 5.28% vs national average of 4.6%
  • In FY 2013-14, growth in industrial sector was 9.58% vs the national average of 0.7%
  • In FY 2013-14, growth in service sector was 7.8% vs the national average of 6.9%
  • Total investment proposal received in the last 1000 days is in the tune of Rs 1,20,000 crore and the work in progress in the tune of 78,000 crore. Interested companies include SAIL, Ultratech cements, Reliance cements, ESSAR and others.
  • According to figures published by Department of Industrial Policy and Promotion (DIPP), in 2014, up to 31st October, the total investments implemented are in the tune of 3581 crore which is third highest in the nation.
  • In the last three and half years, total investments implemented is in the tune of Rs 7310 crore in “Big Industry”; compared to last 4 years of Left rule it is almost 2.5 times.
  • Creation of land banks, industrial clusters, clearance under 14Y has given a boost to Industrial growth.
  • 14 new IT hubs have been sanctioned. 117 industrial units have been allotted in the government industrial park.

 

Come to Bengal… Ride the growth: http://bengalglobalsummit.com/