Kolkata: The arithmetic is clear now. Multiple market borrowings in a single month has now become the essential compulsion of the West Bengal government now to meet its recurring expenses, to be more precise non-plan expenditure. After borrowing twice in two separate tranches in December 2021, in January 2022 too the state government is treading the same path.
According to a notification issued by the Reserve Bank of India (RBI), a total of 12 Indian states are going for a total market borrowing of Rs 20,659 crore on January 18, 2022. West Bengal's borrowing in that tranche will be Rs 1,000 crore. ETV Bharat has a copy of the RBI notification.
However, the silver lining is that unlike the earlier three tranches, West Bengal is not the highest borrowing state in this tranche, while Uttar Pradesh with the borrowing figure of Rs 3,000 crore is the highest borrowing state.
This is the second tranche of market borrowing by the West Bengal government during the current month of January 2022. Earlier on January 6, 2022 West Bengal government borrowed Rs 2,500 crore being the highest borrowing state in that tranche. On that date nine Indian states borrowed a total of Rs 19,340 crore from the open market.
In the last month of December 2021 too, West Bengal borrowed twice from the open market. On December 14, 2021 seven Indian states borrowed a total of Rs 7,053 crore, with the borrowing figure for West Bengal then standing at Rs 2,500 crore making it the highest borrowing state in that tranche.
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Again on December 24, 2021, 16 Indian states borrowed a total Rs 22,984 crore, with the borrowing figure for West Bengal government standing at Rs 4,000 crore. West Bengal was the highest borrowing state in that tranche as well. This means that within a span of just 35 days from December 14, 2021 ad January 18, 2022 the total borrowing figure for West Bengal government will stand at Rs 10,000 crore.
It is worth mentioning that in May 2021, when the Trinamool Congress regime came to power in West Bengal ousting the 34-year long Left Front rule the total accumulated debt of the state government was Rs 1.94 lakh crore. By the end of the current financial year of 2021-22, the same accumulated debt figure is expected to cross Rs 5.50 lakh crore.
Previously also ETV Bharat has highlighted this over-dependence of the West Bengal government on market borrowings. Economists feel that this trends hints three factors. The first is that during the last ten 10 years the non-plan expenditure of the state government has inflated at such an alarming stage, the state government has become compelled to go for market borrowing to meet those expenses. Secondly, since the state government does not have a steady and alternative source of state's own revenue generation, it has to depend on market borrowing.
Finally, economists apprehend that the state government is on the verge of falling in the debt trap, where it has resorted to fresh borrowings to service the earlier debts.
Economists also feel that currently the debt to gross state domestic product ration (GSDP) ratio in West Bengal has reached 30 percent and things will go out of control if it reaches 50 percent.
