PM's Meeting with West Bengal CM

Published By : Admin | March 9, 2015 | 14:40 IST

The Chief Minister of West Bengal, Km. Mamata Banerjee, met the Prime Minister today in Parliament House. Subsequently, a delegation of MPs from the Trinamool Congress along with the Chief Minister met the Prime Minister.

 During the meeting, Chief Minister of West Bengal raised the debt problem that the state was facing, most of which was a result of the actions of past governments. This debt burden, leading to high interest payments, was affecting development expenditure in West Bengal. She asked for debt relief and relief from interest payments. She was also concerned about pending releases.


The Prime Minister explained that he is a firm believer in Cooperative Federalism. He has constantly been saying that only strong states can make a strong India and therefore, states must be strengthened to meet development needs of their people.

 West Bengal and Kolkata have to develop, for their own sake, and for the benefit of the region. That is why we have the "Act East" policy. The region has talented people and a lot of resources. The Prime Minister stated that he is fully committed for West Bengal's and Kolkata's development.


 It is with this in view that the Central Government has agreed to devolve 42% of the divisible pool of taxes to states for the next five years. This is unprecedented and a rise from 32% which is the current share. In addition, the Central Government has accepted  other recommendations of the 14th Finance Commission relating to Revenue Deficit Grants and other Grants.

 Among the large states, West Bengal is one the most important beneficiaries of this decision.  The major benefits that come to West Bengal are:

 Five Years  2015-2020 

    1. The tax devolution in the next five years, from 2015-16 to 2019-20 will be around ~Rs.2,90,000 crore as compared to ~Rs.1,06,000 crore in the last five years. This is an increase of ~ Rs.1,80,000 crore,  i.e., 174%
    2. West Bengal’s share of taxes has been increased from 7.264% to 7.324%.
    3. Most importantly, West Bengal is getting a Revenue Deficit Grant of Rs 8,449 crore in 2015-16 and a total Revenue Deficit Grant of Rs 11,760 crore. The only other non-special category states getting this grant are Kerala and Andhra Pradesh. The Revenue Deficit Grant takes into account the interest burden on the state because of debt.
    4. Therefore, the total Additional Resources going to West Bengal over the next five years [tax devolution and FC grants] will rise by Rs.2,05,900 crore, an increase of 174% compared to the last five years. They will rise from Rs 1.18 lakh crores to Rs 3.24 lakh crores.

 Financial year   2015-2016 

  1. The tax devolution to West Bengal in 2015-16 will rise by ~Rs 13,000 crore compared to 2014-15. It was Rs 25,340 crore in 2014-15 and is estimated to be Rs 38,461 crore in 2015-16
  2. West Bengal is getting a Revenue Deficit Grant of Rs 8,449 crore in 2015-16.There are also grants to Local Bodies which have almost doubled.
  3. If all these transfers are put together, on a year to year basis, the increase in resources to West Bengal will be Rs 22,000 crores in 2015-16 compared to 2014-15, an increase of 80%.

 On the problem of debt, the Prime Minister said that you have inherited a large burden. We too have inherited a large burden. The Centre and States have to collectively find a solution to this. In any case, the 14th Finance Commission has taken into account the interest burden on states and has fully compensated the revenue deficit arising as a result of this. This is why West Bengal is getting an additional Revenue Deficit Grant along with only two other non-Special Category States. Therefore, interest burden should not affect development activities any more in future.


 The additional financial resources being made available by the Central Government from the current fiscal onwards will substantially improve the position of the State to discharge interest liability and free up funds for developmental activities to boost growth.

 The Prime Minister also pointed out that, the Union Government has decided to give West Bengal the royalty on coal and other minerals. This will provide a benefit of ~ Rs 1,600 crore to the state annually. In addition, West Bengal will get Rs 11,200 crore from the coal blocks that have been auctioned so far and there will even more revenue in future.


 In this scenario, West Bengal is better placed as compared to the past and has adequate funds to meet its development needs fully.

 On the issue of releasing funds under MNREGA, the Prime Minister assured that this scheme is fully provided for. West Bengal has already received Rs 3,744 crores this year and pending claims of ~Rs 1,500 crore will be settled in March itself.

 The Prime Minister said that no stone will be left unturned for the development of West Bengal.

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