Bad news continues to dog West Bengal Chief Minister Mamata Banerjee, whose two ministers, two MLAs and numerous party leaders are in CBI and ED custody for alleged involvement in various scams.
On Monday, automaker Tata Motors informed the stock exchanges that the company had secured an arbitral award of Rs 765.78 crore, plus interest as compensation from the West Bengal Industrial Development Corporation (WBIDC) on account of the loss of capital investments with regard to the now scrapped Tata Nano manufacturing facility at Singur in West Bengal. Mamata Banerjee had led the agitation which led to the Tatas abandoning the project and transplanting it to Sanand in Gujarat, whose Chief Minister at the time was Narendra Modi.
The company had been building the facility to manufacture the ambitious Tata Nano, but it was forced to scrap the project in the face of protests by the land losers who had united under the banner of Mamata Banerjee’s party.
The second whammy came when it was revealed that the Chatterjee Group, led by Bengali NRI Purnendu Chatterjee, too, had won an arbitration award against the Bengal government in a commercial dispute over the failure to pay financial incentives worth Rs 3,285 crore to Haldia Petrochemicals Ltd (HPL).
An arbitral panel comprising three retired Supreme Court judges, including two former Chief Justices of India, ruled in favour of the claimant Essex—a Chatterjee Group company—while rejecting the objections raised by the state government. Even though government sources and Trinamool insiders said that the government would file legal challenges against both the awards, which would help it gain breathing time, it has laid bare the precarious state of the finances of the state.
While agriculture-related schemes and various other freebies have drained the West Bengal’s government’s finances, its debt constitutes more than a third of its state GDP, while its tax revenue has often accounted for less than a third of its total annual receipts in recent years. “It is a fact that Mamata Banerjee has always indulged in reckless populist measures,” a retired IAS officer, who had served in both the state and the Centre and now enjoys the blessings of the Chief Minister, told The Sunday Guardian, on the condition of anonymity.
Economists, too, have voiced fears that populist schemes may end up wrecking the state’s economy as they did in Sri Lanka. While states are entitled to a portion of Central revenues and the Goods and Services Tax, their independent sources of income are limited to excise on alcohol, value-added tax on petrol, receipts from property-sale, and motor vehicle registration. Yet, they must spend on health, social welfare, and other critical areas. Expenditure in these segments has increased in recent years.
The West Bengal government’s own website lists 28 schemes which are on offer to the state’s citizens and include schemes like Khadya Sathi, Banglar Awas Yojana, Nijo Griha Nijo Bhumi, Swasthya Sathi, Kanyashree, Sikshashree, Aikyashree, Student Credit Card, Lakshmir Bhandar, Krishak Bandhu, Samajik Suraksha Yojana, Manabik Pension, Jai Bangla Pension Scheme, Bidhaba Bhata and Yuvashree.
“The key to the survival of Mamata Banerjee government, despite its widespread and all-pervasive corruption and mismanagement are these schemes which benefit each and every member of society. In every election, the TMC plants the fear that these benefits will stop if Mamata is ousted, and the population—especially women and the rural population—gets carried away,” a senior BJP leader said.
“The freebie culture is not doing anything to benefit the state in the long-term, but the poor people are happy to receive these doles,” says Md Salim, the CPM Politburo member. Minister of State for Finance (Independent Charge) Chandrima Bhattacharya said that under instructions of the Chief Minister, she had widened the ambit of social welfare schemes like Lakshmi Bhandar, added a new scheme providing death benefits for fishermen, promised financial assistance for micro-enterprise and allocated Rs 3,000 crore for rural road connectivity and repair of urban roads in the state in the last state budget.
“Mamata Banerjee is the guardian of all people of the state. Just as the guardian goes hungry to ensure that all others in the family get to eat, so does MamataDi,” she told The Sunday Guardian.
She blamed the BJP for its “conspiracy to paint Bengal in a bad light”, citing a Niti Aayog report titled “National Multidimensional Poverty Index: A Progress of Review 2023”, which shows that in West Bengal, 11.89% of the population lives under multidimensional poverty, and the figure is only marginally lower for Gujarat at 11.66%.
“This is despite the fact that Gujarat’s per capita income—or average earning of a person in a specified year—of Rs 2.5 lakh, is twice that of West Bengal’s Rs 1.24 lakh, according to the 2021-22 estimates of the Ministry of Statistics and Programme Implementation,” she pointed out.
Another Damocles Sword that is hanging over Mamata Banerjee’s head is the DA issue, points out Biswanath Chakraborty, a professor of political science and well-known TV commentator. “Mamata Banerjee has said that the state government is in no position to increase the Dearness Allowance for its employees due to an acute cash crunch, even though these employees have been on dharna for more than one year. She said that she would not be able to pay DA even if her head was cut off.”
“The government has lost six times before various tribunals and courts. It has now appealed before the Supreme Court, where no less than ten hearings have been adjourned in the past one year,” points out Chakraborty.
Shyamal Kumar Mitra, leader of the Confederation of State Government Employees, which had filed and won the DA cases says: “It is surprising that while Trinamool leaders like Abhishek Banerjee are able to get dates as per their wish, the DA case gets postponed day after day, month after month.”