West Bengal Chief Minister Mamata Banerjee on Thursday wrote a letter to Prime Minister Narendra Modi, expressing concern over “steady reduction” in Central funds to the State and “inordinate delay” in their release.

She claimed that while the earning of the Central government is increasing through collection of “cess and surcharges”, the “receivables of the State” from the Centre is reducing since the BJP government came to power in 2014. Ms. Banerjee wrote that the West Bengal government has been deprived of an outstanding amount of nearly ₹50,000 crore under several heads.

One of the key factors is that the Centre is increasingly relying on “cess and surcharges”, which have gone up from 6.17% of the Gross Tax Revenue in 2014-2015 to 18.4% in 2019-2020. “Since these do not form a part of the kitty of Central taxes, their devolution to States does not happen”, thus reducing the “receivables of the State”. But more fundamental challenges are evolving out of the delay in paying GST (Goods and Services Tax) compensation to the States, she wrote.

‘Negative impact’

The GST compensation of November 2019 was cleared in February 2020, “having a serious negative impact on the management” of the States’ finances, the letter noted. In addition, “Bengal is being denied of ₹11,212 crore of devolution funds from the Centre during the financial year 2019-20”, as estimated in the previous budget. Devolution of Central taxes reduced over the last two years, as well. An amount of ₹2,330.01 crore Special Backward Regions Grant Fund has not arrived either, the letter stated.

Altogether the State has been “deprived” of an amount of nearly ₹50,000 crore, the Chief Minister claimed. However, over the last decade the State has “repaid a staggering loan of ₹3 lakh crore towards debts and interest… left behind by previous Left Front Government”. Despite, working against odds, the State GDP is at 10.4%, higher than the national GDP, and Industrial Production (IIP) is 3.1% (April-November) as compared to national IIP of 0.6%. The State is also significantly ahead of the Centre in services sector, she wrote.