West Bengal Chief Minister Mamata Banerjee has expressed strong displeasure at State governments being overlooked in the economic relief package, the first phase of which was announced by Union Finance Minister Nirmala Sithraman on Wednesday.

According to her, demands such as faster release of GST dues and other pending dues of West Bengal, running to the tune of ₹52,000 crore, have been overlooked. A request to expand borrowing limits under FRBM (Fiscal Responsibility and Budget Management) Act to 5 per cent of the GSDP (Gross State Domestic Product), from the existing 3 per cent, has fallen on deaf ears.

Banerjee said the exchequer’s monthly loss because of suspension of economic activitiesdue to Covid-19 stands at ₹5,000 crore. This apart, the State has an annual debt repayment burden (including interest and principal) of over ₹50,000 crore.

‘An eyewash’

“There is nothing for the States in the so-called economic relief package. How will we survive when revenue generation is almost zero,” the Chief Minister said, adding that “it seems the Union Finance Minister has mislead the Prime Minister.”

“This is an eyewash,” she said, adding that the Centre has so far done nothing to generate demand, nor has it released funds to help State governments set up infrastructure to fight the Covid-19 pandemic. “We were expecting a Covid-19 relief package that will help States fight the pandemic. That, too, was not announced,” Banerjee said.

The West Bengal Chief Minister has been a vocal critic of the Centre, especially Prime Minister Narendra Modi and his policies. She has often criticised the “unilateral” decision-making by the PM.

“Federalism is being bulldozed under the garb of the pandemic and labour laws are diluted through ordinances. This is incorrect,” she maintained.

‘Nothing new’

Meanwhile, State Finance Minister Amit Mitra pointed out that of the ₹20-lakh-crore economic relief package announced by the Centre, nearly half has been previously announced. This includes a ₹800,000-crore liquidity boost by the RBI and a second relief package of approximately ₹2-lakh crore. Another ₹4.2-lakh crore is the additional borrowing limit that has been created by the Centre, which in reality is actually just 2 per cent of the country’s GDP, he said.

“The economic relief package is not 10 per cent of the GDP, but just 2 per cent. And nearly half of the package has already been announced in phases. People are simply being misled,” Mitra said.

He also criticised the fact that there was no “direct benefit transfer” to the affected people at the bottom of the pyramid.

Bonus for government employees

West Bengal has announced a festival advance and an ad hoc bonus for 10 lakh government employees including school teachers, university staff and even contractual employees across civic bodies. The expected burden on the exchequer is to the tune of ₹400 crore.

Banerjee justified the move as a “humane one” even though the State’s finance are not in the pink of health.

“Most States have reduced government employee salaries or delayed payment. The Centre has frozen DAs. But we have not done anything, as we are a humane government,” she reiterated.

Political observers say the move is aimed at placating the government employees who have reportedly been unhappy with the State government on many counts. Moreover, a substantial part of them (and their family members) voted against the Trinamool Congress in the 2019 Lok Sabha polls after the State government failed to implement the Pay Commission recommendations.

With civic body elections due any time this year, and assembly elections set in 2021, Banerjee does not want to risk irking them again.

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