The Hindu Business Line : Bengal must take up fiscal correction: Chidambaram

THE West Bengal Government should, without any further delay, adopt the Fiscal Responsibility and Budget Management Act and draw up its own fiscal correction path to take advantage of the liberal debt-relief programme provided by the 12th Finance Commission , the Union Finance Minister, Mr P. Chidambaram, has said.

Speaking at the inaugural session of the 105th annual general meeting of the Bharat Chamber of Commerce (BCC) here on Friday, he said the State Government should take advantage of the recommendations of the 12th Finance Commission and set in motion the required fiscal correction programme. The States, according to him, now have a golden opportunity to put their fiscal deficit position in order.

He said Rs 14,152 crore has been released for West Bengal during the period April-November 10, 2005. The break-up is as follows: Rs 1,242 crore through Finance Commission recommendations, Rs 3,832 crore on the basis of devolution of State's share of taxes, as recommended by the Commission, Rs 1,826 crore by way of grants, and the State's own additional small savings of Rs 7,252 crore.

According to Mr Chidambaram, the fiscal health of the States was fundamental to the country's fiscal health.

The Minister said the usual complaint of "not enough money given" was no longer valid, for, as per the Finance Commission recommendations, the States, for the 2005-10 period, would now receive Rs 50,877 crore, an increase of nearly 30 per cent over the earlier earmarked figure of Rs 35,652 crore.

Calling for "development ethic", as mere work ethic alone would not do for achieving higher growth rates, he said the Indian economy was now doing well because more people are involved in discussing the development ethic. Explaining the virtual cycle of jobs and incomes, he said both private and public investments have to be enhanced for achieving satisfactory growth rates. Stressing on greater financial savings by households, he conceded that government was a "notorious dis-saver". More growth will happen only if savings and investments go hand in hand, he said.

Earlier, Mr Santosh Rungta, President of the chamber, said raising the growth bar would not be possible without dealing with the current stagnation in Indian agriculture, which must grow at over 4 per cent. He said, "We must delink the subsidy regime from the cropping pattern, so that the farmer grows what the market wants and not what the support price systems dictate".

Mr Rungta said there was a need to eliminate all the restrictions on inter-State movement of farm produce to create one Indian market for the farmer and to link him to the farm-producers. He also sought a thrust to food retailing, including FDI in food retail, as it would promote export of farm goods from India through global retail chains.

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