The State’s public finances are more stressed than most other States in the country, said RBI Governor D. Subbarao in Kolkata on Thursday.
“Public finances in West Bengal has been tight, tighter that most other states. Both the State Government, Central government and RBI recognise it,” Subbarao said.
The rate at which the State borrows from the market is 10 to 15 basis points above the average borrowing rate of other State Governments. “It is an indication of the market assessment of public finances of West Bengal,” he said.
West Bengal’s credit-deposit ratio is likely to go up to 65 per cent in 2012-13, up from 63 per cent during the last fiscal.
“There has been a significant improvement in the CD ratio and we have asked banks to take it up to 68 per cent in 2013-14,” Subbarao said.
According to Subbarao, 8 out of 18 districts of the State had a CD ratio below 40 per cent. The eight districts are Burdwan, Bankura, Birbhum, Hooghly, Murshidabad, Nadia, Purulia, 24 Parganas (North), 24 Parganas (South) and Paschim Midnapur.
“We have asked banks to take it up by five percentage points by March 2013 and they have agreed to do so,” he said.
The State Government and banks should work towards operationalising the electronic benefit transfer (EBT) on pilot basis in six districts from March 1. “None of the districts in the State is among the 51 selected nationwide by the Centre for providing direct cash transfer from January,” he said.
He further stated that the State lagged most other states in extending credit linkages to self help groups (SHGs). “We have asked banks to provide linkage to additional 1.5 lakh self help groups (SHGs) for extension of credit other than those who have returned the loans and have good credit ratings,” he said.
Later during the day, Subbarao met West Bengal Chief Minister Mamata Banerjee and Finance Minister Amit Mitra at the State Secretariat.
According to Mitra, of the 11.16 lakh SHGs in the State, only 9.69 lakh are credit linked by banks.
“West Bengal has disbursed only about Rs 551 crore to SHGs while the disbursals in Andhra Pradesh is as high as Rs 8,171 crore and that in Tamil Nadu stands around Rs 2,000 crore,” Mitra said while briefing newspersons after the meeting.
The RBI Governor, Mitra said, further discussed the issue of providing banking services in the remote villages of the State. “Of the 37,000 villages in Bengal, nearly 27,767 villages have no bank branch,” he added.