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Kolkata, Feb 12 – West Bengal minister of state for finance (independent charge) Chandrima Bhattacharya is all set to table the state budget for the financial year 2023-24 in the assembly on February 15.
As per indications so far it is almost certain that West Bengal will not only meet its target for state excise collection for the financial year ending March 31, 2023 but will also surpass it. As per the budget estimates for the fiscal ending March 31, 2023, the target for state excise collection was Rs 16,500 crore and as per records of the excise department the collections under this head had already crossed Rs 13,500 crore as of January 31, 2023.
“We can now confidently set a much higher state excise revenue collection in the budget estimates for the financial year 2023-24, considering that there had been an upward revision in liquor prices in January this year,” said a senior finance department official who refused to be named.
There is the question that while the state government will exceed its target of excise collection, whether the state government will achieve its targeted collection of the state’s own tax revenue, where excise is just one of the 12 components. As per the budget estimates for 2022-23, the state government has set a target of collecting Rs 79,346 crore as state tax revenue.
Besides excise, this time there is yet another proposal to get substantial funds for the exchequer. The state government is planning to change the land holding laws to convert leased land to owned land. Under the change, the state government will give an option to the parties to whom they have leased lands on a long-term basis to purchase that land at the existing market rates in the areas where the land is located.
“Generally, when the state government gives the land on lease to any party the lease amount is much less than the market price of land. So now, by selling that same land at market rate, the state government will be able to get substantial funds for the state exchequer which can be used for different welfare and development projects,” said an official.
Economists feel that while this is undoubtedly an effective way to get funds for the exchequer, this will not help the state government in earning or improving its own tax revenue.
“By selling a piece of land the state government will get a one-time fund for its exchequer. But if the same land could be used for setting up a big industry, the tax revenue generated from that industry would have been there year after year. Selling assets for meeting expenditure is not healthy economics. Rather using assets for recurring revenue generation should always be the target. In fact it seems the policies of the Union government and the state government on this count are the same, which is selling state assets for meeting regular government expenditure,” said professor of economics Santanu Basu.
Meanwhile, finance department sources said that the budget speech this time might announce some policies for encouraging start-ups and the manufacturing sector.
According to economist PK Mukhopadhyay while encouraging start- ups will be a good initiative on the part of the state government, it is high time that the focus is shifted to attracting big-ticket investment both in the manufacturing and the services sectors. “But for the manufacturing sector the necessity is the change in the land policy of the state government where it has come out of its announced stand of no state role in land procurement for industry. Considering the fragmented land holding nature no industrialist will be interested in purchasing land from individual owners especially when the land requirement at one go is high. As for the services sector, especially information technology and IT-enabled services sector, it will be difficult for the state government to attract big-ticket investments unless it moves away from its stand of not allowing fresh special economic zones in the state,” he said.
Also, all eyes will be on what will be the projected accumulated debt of the state government by the end of the next financial year of 2023-24. As per the budget estimates for the financial year 2022-23, the state’s total accumulated debt is slated to rise to Rs 5,86,438.05 crore by March 31, 2023, up from Rs 5,28,833.05 crore as per the revised estimates for 2022-23. During the financial year ending March 21, 2011, which was the last fiscal under the previous Left Front regime, West Bengal’s accumulated debt was around Rs 1,90,000 crore.