Pushed to the wall over the state government's decision to hike VAT on a range of consumer items when the assembly is not in session, state finance minister Asim Dasgupta on Saturday laboured to explain the urgency of the government.
"We don't take this route usually. This is a special situation. The issue came up during the meeting of the Empowered Committee for State Finance Ministers earlier, where most states were of the opinion that VAT should be increased. Some of the states did it long ago. And we have done only now.
But while doing that, we took care to ensure that the hike is only on luxury items. VAT rates for essential items, inputs for agriculture such as fertiliser, remain unchanged. We chose to implement it this month because price rise is under control now," the state finance minister said.
Sensing the public mood over the frayed state finances, Dasgupta said: "I don't know why West Bengal is being touted as a broke state. It is true that going by some statistics, Bengal's financial health is not sound.
In fact, going by RBI estimates, Bengal ranks 11th among the 28 states. And if one points to Bengal's debt situation, one should also compare that with borrowings by the Centre, which is as much as Rs 35 lakh crore."
The minister argued that the budgetary accounting has to be different from the existing one. Dasgupta wants the Centre to deduct Rs 7,991.63 crore of net small savings in West Bengal from the central loan head that will relieve the state to a large extent from its debt liability.
Dasgupta's scheme is quite specific. He wants the Centre to transfer Rs 8,000 crore from small savings (not as loan), raise the state's share in taxes, calling for more economic power.