At a time when state revenues have not grown much, borrowing in the market may be the only viable alternative for Mamata Banerjee’s government to manage social programs like Swasthya Sathi Where Lakshmir Bhandar announced by the Prime Minister before the legislative elections.
Financial experts are of the opinion that at present it is not difficult to manage these programs by taking loans in the market, but if the government cannot improve its income structure in the years to come, then in the long run, it would become impossible for the government to give these social benefit schemes a permanent status.
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After coming to power for the third time, Chief Minister Mamata Banerjee announced two big plans: Lakshmir Bhandar and Swasthya Sathi for all – which requires a huge financial implication. Lakhmir Bhandar is a project where the state is supposed to give Rs 1000 to women belonging to SC / ST / OBC and Rs 500 to women belonging to the general caste. The government has allocated a budget of around Rs 12,900 crore for around 1.8 crore of women who have so far enrolled in the program.
Initially, the government estimated that nearly 2 crore of beneficiaries would enroll in the program. Lakshmir Bhandar project, but so far the government has received 1.63 crore of applications of which 1.52 crore have been approved. Almost 7 lakh requests were canceled. The government has spent over Rs 800 crore on the project and, according to the figure that the finance department estimates that the state government will have to shell out another Rs 5,600 crore, which could, in turn, lead to a staggering number over a full exercise. .
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Against Ayushman Bharat of the Center, the state launched its own program, Swasthya Sathi Prokolpo where some state residents received annual medical coverage of Rs 5 lakh. After coming to power in 2021, the prime minister opened Swasthya Sathi for all residents resulting in a jump in spending. Even a year ago the estimated budget for this project was around Rs 925 crore, this year the allocation hit Rs 2000 crore per year.
Financial officers are of the opinion that for these projects alone, the state government will have to spend around Rs 18,000 crore over a full fiscal year. Interestingly, for fiscal year 2021-22, the state government is seeking additional market borrowing of around Rs 17,602 crore compared to fiscal year 2020-21, which is a strong indication that this could meet the financial requirements of these social schemes.
Just before preparing the budget, the finance ministry asked various ministries to be careful with their spending. Financial watchers believe it will be difficult for the state government to maintain the traditional “balance” this time around. There are many other projects that the government will need to consider as the Trinamool Congress came to power through the successful implementation of these plans.
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Apart from Lakshmir Bhandar, Swasthya Sathi, huge expenses have to be incurred for projects such as Krishakbandhu (Rs 3,700 crore), the education loan card (Rs 250 crore), the door-to-door ration (Rs 1,200 crore) and the free ration (Rs 1,400 crore). In addition, the government will have to keep Rs 63,600 crore to pay interest on its loans and another Rs 70,431 crore for payment to employees and pensioners.
It will be interesting to see how the budget – the first after coming to power for the third time – expected in the next three months, negotiates this huge financial burden on the public purse.
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