Fiscal position of WB in 2006-07 show deterioration

Kolkata, Mar 28 (UNI) The fiscal position of West Bengal viewed in terms of the key parameters - revenue, fiscal and primary deficit - showed deterioration in 2006-07 over the previous year, according to the reports of the Comptroller and Auditor General of India (CAG).

The reports, which were tabled in the Assembly yesterday, said the state government had foregone the relief in interest payments on Central loans as well as debt relief and other benefits linked to the fiscal performance of the state during 2005-06 and 2006-07.

Revenue expenditure as a percentage to total expenditure hovered around 90 per cent during 2002-07 leaving inadequate resources for expansion of services and creation of assets as a result of which only 32 per cent of fiscal liabilities of the state had asset back up during 2006-07, the reports said.

Moreover, it said four components of revenue expenditure-salary expenditure, pension liabilities, interest payments and subsidies constituted about 76 per cent of the revenue expenditure during 2006-07.

The continued prevalence of revenue, fiscal and primary deficits in the finance accounts of the state indicated the increasing reliance on the borrowed funds to meet the current expenditure, the reports said.

'' The increasing fiscal liabilities accompanied with negligible rate of return on government investments and inadequate interest cost recovery on loans and advances might lead to an unsustainable debt situation unless measures are initiated to compress the non-plan revenue expenditure and to mobilise the additional resources in ensuing years, '' the reports said.

UNI ADG SJC AB 2005