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West Bengal seeks 3-year interest moratorium from Modi-led government

LiveMint logoLiveMint 09-06-2014 PTI

New Delhi: After failing to get a financial rescue package from the previous UPA-II government, West Bengal on Monday sought a three-year moratorium on payment of interest on debt from the new Narendra Modi-led government.

The state government had to shell out `77,000 crore in last three years just to service the debt, its finance minister Amit Mitra said here. “We have requested finance minister Arun Jaitley to consider providing the state an interest moratorium for three years and explore ways in which this can be done,” Mitra said.

Mitra, who was here to take part in Jaitley’s pre-budget consultations meet with state finance ministers, said due to the interest outgo, development projects worth over `3 trillion could not be taken up in the state.

The Trinamool Congress government in West Bengal had been seeking a moratorium since it came into power in May 2011.

Replying to a question on whether the relation between TMC and BJP can come in the way for the interest moratorium, he evaded any direct answer, saying, “My leader Mamata Banerjee asked me to come to the meeting in the interest of the people of West Bengal and I did so.”

Asked whether he was hopeful of a positive reply from the Centre, he said, “It was not a meeting of responses, but of consultations ahead of the budget.”

The Mamata Banerjee-led government blamed the previous Left Front regime in the state for leaving behind a huge debt burden. Mitra did not give the current size of the debt. At the meeting, Mitra alleged that the previous dispensation at the Centre did not release funds commensurate with its share to the state.

Stating that the state was in favour of implementation of GST (goods and services tax), he, however, said the Centre should compensate the revenue loss because of the phasing out of CST (central sales tax).

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