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Rediff.com  » Business » Bengal package: Amit Mitra meets FM, talks inconclusive

Bengal package: Amit Mitra meets FM, talks inconclusive

June 11, 2012 15:46 IST

HandshakeWest Bengal Finance Minister Amit Mitra on Monday called on Union Finance Minister Pranab Mukherjee to seek a special package for the state, but talks remain inconclusive.

"Discussions are going on . . . when discussions will complete, we will speak to the Chief Minister (Mamata Banerjee", Mitra told reporters after the meeting which continued for more than two hours.

The Mamata Banerjee government, which came to power in July last year, has been demanding special package in the form of interest moratorium.

Banerjee, whose party is a crucial constituent of the United Progressive Alliance, had herself raised the issue with the Prime Minister and even issued a veiled threat to the Centre.

The state government has a debt of about Rs 2 lakh crore (Rs 2 trillion) and its current annual outgo towards interest payments is around Rs 22,000 crore (Rs 220 billion).

Mukherjee during a debate in the Rajya Sabha in May had said that West Bengal would have received the relief had it enacted the Fiscal Responsibility and Budget Management law in 2005, as was suggested by the 12th

Finance Commission.

West Bengal, however, passed the FRBM Act only in 2011 and the delay, according to a report of the Comptroller and Auditor General, cost the state Rs 3,158 crore (Rs 31.58 billion) in terms of relief from the Centre during 2005 and 2010.

"Because of delayed enactment of the fiscal responsibility legislation, the state could not avail of total relief of Rs 3,157.90 crore (Rs 31.57 billion) during 2005 to 2010 on account of debt relief, relief on interest payment an debt waiver, on outstanding government of India loans," the CAG report had said.

The Centre had already set up a committee to look into problems being faced by three debt-stressed states -- West Bengal, Punjab and Kerala.

Mukherjee had also said in Parliament that he could not give preferential treatment to the state even though he himself belongs to it.

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