Everyone is talking about the elections in West Bengal, but nobody is talking about the economic slowdown

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West Bengal Prime Minister Mamata Banerjee may be fighting her grand election; increasing their rivalry is not only the policy of the BJP against Trinamool, but also the economy of the state.

Banerjee’s banners are all about corruption and rival philosophies at the local level, as well as stagnating industrialization, slow credit expansion, almost freezing of new jobs, low infrastructure creation and agricultural spending. West Bengal’s GSDP growth was 7.26 percent in 2019-20, above the national value of 4.0 percent in the same year, but was lower in four of the five years from 2015-16 to 2019-20.

According to RBI figures, West Bengal is one of the worst performers when it comes to expanding bank lending. Although total lending by scheduled commercial banks in India increased by 20% between the fourth quarter of 2018 and 2020, West Bengal saw only a slow increase of 10.6%. West Bengal was the only state that rose more slowly than Goa and Punjab. West Bengal had not only one of the slowest growth rates for bank loans in the two years, but also one of the slowest growth rates for bank deposits. Although deposits increased by 19.8% across the country during this period, they increased by 14.1% in West Bengal.

Derek O’Brien, head of the Trinamool Congress in the Rajya Sabha, said Modi-Shah and her tourist gang cannot compete with us on real indicators of good governance and legitimate growth.

However, in the fourth most populous state, high unemployment rates can be a challenge. According to CMIE statistics from February 2021, West Bengal had an unemployment rate of 6.2 percent, which was higher than many states but lower than the national rate of 6.9 percent – the state ranked 17th out of 27 states. The state still has low daily and per capita incomes. While in 2020 rupees 294 was the nationwide average regular non-farm wage, Care Rating’s study shows that the wage rate in West Bengal has fallen by nearly 8.5 percent. It stood for Rs 670 and Rs 438 for Kerala and Tamil Nadu, respectively. The figure of Rs 1,16-lakh was also 16% lower than the national average for per capita income in West Bengal.

There are glaring holes in West Bengal with MSMEs, a crucial indicator of local businesses and employment. In 2015-16, the state had 88.67 lakh MSMEs, only the second of Uttar Pradesh, according to NSS 73. MSMEs employed approximately 1.35 billion people. However, West Bengal appears nowhere in the list of top 10 states based on the study of 13.47 lakh companies that completed the MSME Udyam registration process – under the Ministry of MSME – by December 31, 2020. Maharashtra, Tamil Nadu, Gujarat, Rajasthan and Uttar Pradesh are among the top 5 in the ranking. In West Bengal there were only 27,776 MSMEs with Udyam registration and an average of 5.84 employees.

The state offers a mixed bag for social and growth indicators. Official data shows that while government spending on education and rural / urban growth areas is above the national average in 2019-20, the budget for highways, health and agriculture is lagging behind. The share of social spending – for education, health, recreation, arts and entertainment, infrastructure, water supply, jobs, and other sectors – as a share of total spending rose from 16.34% in 2016-2017 to 19.42% in 2018-2019 increased strongly. In 2019-20 it fell slightly to 18.83%. In 2019-20 the share of agriculture fell sharply. In fact, the share of total spending on agriculture was lowest in the six years to March 2020. In addition, spending on physical infrastructure decreased by 3.33% in 2019-20 – the lowest in the last five years, a decrease in 2019-20. At 5.1 percent of investments in 2019-20, the state’s health expenditure is slightly below the national average of 5.3 percent for the same period (budget estimates). In 2019-20, West Bengal allocated 5.1% of its agriculture and allied budget, which is slightly less than the total allocation of 7.1% given by all nations put together. The government spent 16.8% of its education budget on BE 2019-20, more than the 15.9% average for 29 countries over the 2019-20 BE period.

Given the rural growth, the national budget is well above the national average. West Bengal allocated 10.1% of the budget for rural development BE in the period 2019-20, which is well above the average of the country allocations for rural development of 6.2%. In terms of economic growth, West Bengal allocated 5% of its spending for 2019-20 BE, which is 3.4% more than the country’s average urban development. According to PRS Legislative Research and West Bengal budget papers, government spending on roads and bridges for 2019-20 BE at 2.3% is slightly below the average for all states at 4.2% in the same year.

The share of investments in total expenditure rose continuously between 2016-17 and 2018-19 from 7.96% in 2016-17 to 12.18% in 2018-19. But in 2019-20 it fell dramatically to 8.43%. The state government is accused of failing to implement key plans such as PM Svanidhi Yojana, Ayushman Bharat and PM Samman Nidhi Scheme.

According to the PM Svanidhi Portal, banks in West Bengal only paid 2.07 billion rupees to 2,093 people, while the total of 1,978 rupees was paid out to 19.99 lakh applicants under this program. It was initiated in June 2020 to help suppliers cope with the pandemic. The system is a micro-credit system that offers street vendors an unsecured loan of Rs 10,000 at discounted rates.

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