March 29, 2020
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'Other States Don't Even Pay Wages'

The West Bengal Chief Minister in conversation with Ashis K. Biswas on the state's financial crisis.

'Other States Don't Even Pay Wages'
'Other States Don't Even Pay Wages'
It's crisis time for West Bengal chief minister Buddhadeb Bhattacharya. Through no fault of his, the state faces an acute financial crunch—the product of some populist policies of his predecessor. Bhattacharya has made it clear that he will not hesitate to dispense bitter medicine if the situation in West Bengal calls for it. Within hours of this interview, pay/DA increases for all state employees were put on hold until next year. The CM exudes a quiet determination as he contemplates implementing some unpalatable decisions in this interview given to Ashis K. Biswas. Excerpts:

The present financial crisis has been building up for years. Have we now reached a climax?
The position worsened acutely after the Fifth Central Pay Commission recommendations were announced. Most states announced similar hikes for their employees at par with the Centre, severely straining resources. In Bengal, the problem was compounded by our fiscal commitments for teachers and civic staff. Our monthly wage bill for 900,000 employees is a staggering Rs 900-odd crore, which is hardly sustainable. The Centre can arrange for soft loans. But the Centre's own earnings from the tax pool will be down 18 per cent this year, which will hit us again. We received Rs 700 crore less from the Centre last year. There is no indication that the situation will improve.

Delhi charges 12 per cent interest from the states on foreign loans which it gets at 7 per cent. The Centre is playing the archetypal moneylender. A 2-3 per cent reduction would help us immensely. Instead, I hear, even the temporary ways and means relief of Rs 860 crore announced for us has been withdrawn. In small savings, Bengal tops the list, but interest rates are lowered all the time, affecting our resource mobilisation.

Must all states pay their employees on an equal footing with central government employees?
Of course, there is nothing mandatory about this. As for bonus, the point can be made that since government employees are not directly involved in any production or profit-earning process, it need not be paid. Some states started paying bonus in the late '80s, but by 1993, most, including Kerala, stopped. It couldn't be sustained. Whereas we paid bonus to employees earning less than Rs 8,000 a month even this year, costing us Rs 100 crore. This, when neighbouring states are unable to pay regular salaries.

Fortunately or unfortunately, the buck stops with you. Is it time for make-or-break decisions?
Well, we must do something about matters decided collectively in the past. We added to our burden by extending the retirement age to 60 instead of 58 years. There is also the question of DA payment which we are looking into. People must understand, we have to see reason.

What steps are you thinking of?
First, we must increase revenue collections from all departments, land revenues, judiciary, court fees and stamp duty, sales tax, proper collection of civic/municipality taxes, irrigation water charges etc. Some rates haven't been raised for 40 years. Cess has been imposed on petrol and diesel. Strict austerity measures—no new cars, phones, buildings, hospitality until further orders. Strict monitoring of accounts must be done on a monthly basis. With these measures, we expect to save Rs 750 crore in the next six months. Our annual budget expenses are Rs 29,000 crore, of which Rs 4,000 crore occur by way of plan expenditure. We must prune non-plan expenditure to the extent possible. With some cooperation from the Centre, we will come through, but we will have to tighten our belts.

What are the short-term prospects for Bengal in industry, agriculture?
Well, the Burdwan-Durgapur-Asansol belt, the Ruhr area of India, is staging a major revival through a slew of new iron- and steel-based projects.Downstream units for Haldia Petrochemicals are doing well. The largest Japanese investment in India, Rs 1,500 crore by Mitsubishi, has taken place in Haldia and a second plant is also in the offing. Six Japanese companies have set up a consortium to build the Kolkata-Haldia expressway, and are conducting their own feasibility study. Industrially, Bengal is a happening place once more, with a steady flow of investments.

We produce about 140,000 tonnes of foodgrains, but around 35,000 tonnes are lost through poor storage and leakages. We are building new storage facilities and are ensuring coordination between production and marketing, so that farmers get proper prices. This year, for the first time, we began exporting litchis, pineapples, mangoes and potatoes and this will increase. The Centre has agreed to help us set up four special agricultural zones. I have said this before, we plan to take Bengal into the list of advanced states. We have made a modest beginning and hopefully we can accelerate from here on.
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