Mamata Banerjee writes to PM Modi, calls for release of funds worth Rs 50,000 crore

West Bengal Chief Minister Mamata Banerjee wrote a letter to PM Narendra Modi on Thursday, expressing concern over the "steady reduction" of central funds to the state and "inordinate delay" in their release. The Trinamool supremo said Bengal is yet to receive its share of central funds totalling Rs 50,000 crore till January 2020.

"I write to you with deep concern regarding steady reduction of central funds to the state and also inordinate delay in release of funds to us from the Government of India. You will appreciate that this extraordinary situation is leading to great hardship and creating major difficulties in meeting our obligations for the welfare of the common people of West Bengal," CM Mamata Banerjee said in her letter.

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Dues pending

According to her letter, the Centre has to pay Bengal a sum of Rs 11,212 crores as devolution of taxes for 2019-20, Rs 36,000 crore as grants and Rs 2,406 crore as GST compensation. The Centre periodically shares a chunk of its tax revenues with states which forms a major part of the state treasury. 

The letter claimed that the state was being "denied" devolution funds during the fiscal year, causing a “negative impact on the implementation of development schemes in the state”. Banerjee also claimed that funds to the tune of Rs 36,000 crore for various Centrally Sponsored Schemes (CSS) had not been received.

“I am further constrained to inform you that an amount of Rs 2,330.01 crore is yet to be received by West Bengal from the Central Government on account of Special Backward Regions Grant Fund. It is needless to say these funds could have given a stimulus to our development efforts in the backward regions of our state, helping crore of disadvantaged people to join the mainstream,” Banerjee wrote.

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Cesses, surcharges reducing state receivables

The letter also noted that the rise in cesses and surcharges in the gross tax collections of the Centre has risen substantially in the last five years — from 6.17% in 2014-15 to 18.4% in 2019-20 — which has reduced the receivables of the states. "Since these do not fall in the kitty of Central taxes, their devolution to states does not happen. This has become an instrument of reducing receivables of the State from the Central government," the letter stated.

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Bengal's comparison to national indexes

In her letter, Mamata Banerjee also asserted that despite the decline in central funds the state's GSDP (Gross State Domestic Product) grew by 10.4% against the national GDP growth of 5% in 2019-20. It also stated that West Bengal's index of industrial production (IIP) in April-November 2019-20 stood at 3.1% against the national figure of 0.6%, while the growth of the services sector at 16.4% was much higher than the national number of 6.9%.

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