Mamata: A mountain of debt to climb before reaching out to people

Cold statistics with a bearing on the average voter bear out that mistakes had accumulated over time to become like a critical mass for the Left Front government.

His poser on the widespread sentiment for change here is significant for the fact that through this unique uninterrupted tenure the Left Front in Bengal has also managed to counter whatever anti-incumbency for close to three decades. The same Buddhadev had led the Left front to a landslide victory with 235 seats in the last state elections in 2006.

A telling figure is the state’s accumulated debt burden that stands at over Rs 2 lakh crore and growing. This debt has grown 18 times since 1977 when the Left Front came to power in Bengal. Just servicing this debt claimed Rs 15,000 crore last year, and it has gone up to Rs 16,651 crore this year.

The magnitude of this growing indebtedness implies that Bengal’s economy has become one the most vulnerable in India. It has the highest Gross State Domestic Product (GSDP) to debt ratio among states. Taken together with the ratio of the state’s revenue deficit to GSDP of 3.7 per cent according to the RBI’s revised estimates for 2008-09, and experts are looking at the real possibility of a debt trap.

This situation is also a result of years of poor revenue generation. The state today has a low tax base. A comparison with some other similarly placed states highlights Bengal’s particular plight. Maharashtra, with a similar debt burden for instance, has been mostly using its borrowings from a long term perspective in building assets and infrastructure. In contrast, the big portion of Bengal’s borrowings go towards non plan expenditure: salaries, pensions and the servicing of past loans.

Such a gross shrinkage of the state’s tax base has taken place over a long term. The organised manufacturing sector has been so eroded and so many industries closed down over the past few decades that Bengal has almost become synonymous with sick industry. Correspondingly, the unorganised sector has grown to become the biggest in the country, but as a sector it tends highly to tax evasion.

The recent industrialisation drive of the Left Front has had miniscule impact on the state’s unemployment. It is the question of industrialisation and specifically the issue of acquiring land for industry that acted like a trigger for the critical mass of ‘mistakes’ to be accumulated.

Acquiring agricultural land by the state for other purposes has become a sensitive issue, the most recent case in point unleashing violent farmers’ agitations and deaths in Uttar Pradesh. Mamata Banerjee’s opposition to the acquisition of land for private industries at Singur and Nandigram became the means to crystallise and translate popular disenchantment into a positive vote for her in this key election. Though not a Leftist, through these agitations she gave concrete shape to her image of being pro-poor.

Learning from failures

From the Left’s perspective, Singur was one move to regenerate industry in Bengal, as well as an instance of Left political economy in times of restructuring in a worldwide context of the Left in retreat. Here in Bengal it served to alienate the Left from a lot of its primary constituency. Buddhadev in recent months has spoken of the CPM having learnt from the failures of Singur and being quite open to private industry buying land directly from farmers without the state intervening, in line with the Trinamool Congress demand.

Whither the primary constituency? They are the bulk of those,who have repeatedly voted the left to power in Bengal, where agriculture is by far the largest sector — the beneficiaries of the strategy adopted by the Left in Bengal. “The ‘Operation Barga’ land reforms giving rights to sharecroppers generated a ‘micromisation’ process in agriculture giving identity to millions of people,” says agriculture technologist Ajoy Basu who has indepth working experience of agriculture in Bengal. “They had made the Left so durable in Bengal.”

The results of this ‘micromisation’ strategy are in evidence in the amazing figure of nearly 89 per cent of Bengal peasants being in the marginal land holding category of less than one hectacre. All is not well in this sector, with production tapering off in recent years.

Rice — the major crop in terms of land and labour — is falling 20 per cent short of meeting the state’s requirements. Fragmentation, declining yields, shortage of water as well as of agricultural finance are the major factors in this situation. Farmers suicides in Burdwan district in Bengal’s rice bowl after crop failures last year exposed the extent of distress in certain areas.

Yet with the state of its finances, the Left government was left with even less to nurture its primary constituency. Its staggering debts and interest payments meant that it was having to further downsize spending in sectors like health, education and for development. This is among the bigger challenges for the incoming government.

As for the Left, just as Singur was not the only thing that toppled their government, so also Buddhadev’s admission of mistakes on this count was also too little, too late. The loss in Bengal points the way towards deeper rethinking and restructuring needed for the parties.