No assurance from Union Finance Ministry on three-year moratorium on debt-repayment

West Bengal had reiterated its demand for a three-year moratorium on interest on loans and restructuring of its outstanding debt that was pending with the previous Congress-led government, Finance Minister Amit Mitra told journalists in Delhi after a meeting of finance ministers of the States with Union Finance Minister Arun Jaitley in New Delhi on Monday. The two other States that made similar demands are Punjab and Kerala, both revenue-deficit States.

However, the Union Finance Ministry had not given any assurance on the moratorium on debt-repayment, sources said. The other demands made by the State include quick disbursement of additional funds for the implementation of the National Food Security Act in Bengal. The State government had clearly told Mr. Jaitley that it did not have adequate funds to ensure security of food across the State. Additional funds were sought from the Central government for implementation of various Central schemes.

Earlier, during UPA II, the State government had made similar demands and was told that such moratorium was not possible as the money was borrowed by previous Left Front government, while some concessions were given on ADB and Backward Regions Grant Fund (BRGF).

On Monday, Mr. Mitra placed a 10-point demand before Mr. Jaitley. Besides seeking a moratorium on the debt-repayment and restructuring, a lot of demands were placed. “I have given statistics and logically explained why the moratorium is necessary. I urged the Centre to give clear indications in the Budget on how to restructure the piling debt and also a three-year moratorium on repayment in interest and principal amount,” Mr. Mitra said. He further said that he had ‘raised the voice of Bengal’ at the meet since the State was financially crippled and Rs. 77,000 crore had been ‘repaid to the Centre over the last three years’ after the Trinamool Congress came to power in May 2011, he said.

He placed other demands as well. “While the State government accepts ‘principally’ imposition of Goods and Services Tax (GST) as and when it is implemented, there will be an additional revenue loss to the State. The State government wants the Central government to ‘make up’ for the loss,” Mr. Mitra told the Union Finance Minister.

Additionally, Mr. Mitra gave a list of government schemes which needed funding from the Central government as the ‘money was due’. For example, to implement the National Food Security Act the State would need an additional Rs. 1,000 crore and to implement various projects under Prime Minister’s Gram Sadak Yojana (PMGSY) the State would require another Rs. 4,000 crore. For the successful implementation of the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA), the State was ‘yet to receive Rs. 2,000 crore’ and for Nirmal Bharat campaign in about 18 lakh villages, another Rs. 650 crore was required.

Mr. Mitra explained that these demands were valid and that he was not asking for any favour from the Centre. Around 49 per cent of the funds for minority development were also ‘required to be disbursed’. The State also asked for speedy disbursement of funds to check erosion of banks of the rivers in north-central Bengal and for repair of national highways.


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