Lessons from across the border
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Bangladesh's efforts to boost its revenue collection, bring down subsidies, and cut down fiscal deficit has earned kudos from the International Monetary Fund (IMF)something which its next-door neighbour West Bengal has failed to do. This makes one thing crystal clear — good governance and a methodical approach towards solving problems like huge public debt and fiscal deficit does wonders for a state, even if gradually.
According to a review done by the IMF for its Extended Credit Facility, the country of over 16 crore people, the size of an Uttar Pradesh or a Maharashtra here, has not only brought down the inflationary pressures despite the global headwinds, it has successfully improved the fiscal health by containing fuel and electricity subsidies, limiting budget deficit to 4.1 per cent of GDP in FY'12 and ensuring fiscal restraint. The efforts have been backed by a robust revenue collection.
In contrast, West Bengal is the prototype for poor governance and the resultant economic woes. The abundance of natural resources and a suitable climatic conditions for agriculture has not translated into prosperity for the state. Its own-tax revenue as a percentage of Gross State Domestic Product (GSDP) was merely 4.46 per cent in 2010-11 while public debt as a percentage of total revenue receipt was a staggering 396.47 per cent in the same year. The fiscal deficit was one of the highest in India at 4.13 per cent during the year. The GSDP during the year was 7.06 per cent, a tad higher than only Punjab and Jharkhand if one was to account for only non-special category states. Just a month ago the Asian Development Bank has stepped into Mamata land with a strict set of conditions to unravel its fiscal woes.
With the manufacturing yet to revive, unemployment rampant, infrastructure missing and investments shying away, the state has a long catching up to do with Bangladesh. Trans-border illegal migration in this region could mean West Bengal peasants upping it and leaving for better life chances, next door.
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