It is not as though Ms Banerjee, elected on the basis of populist slogans and promising instant solutions to almost every problem faced by the state, is not working hard to improve things. Her hands-on approach relating to work done by the Health, Food and Home departments has inspired a section of usually apathetic staff. It has also been appreciated by common people. Her efforts to galvanise other Ministers also to work hard in Education, Environment, Rural development and other areas of administration have also been appreciated.

However, some major problems of the administration remain untouched. The state’s precarious financial position, a crippling legacy she inherited from the outgoing Left front, remains as grim as ever. For all her clout at the centre as the major ally of the Congress in the second UPA Ministry, she could not wrest any major financial accommodation from Union Finance Minister Pranab Mukherjee. While certain measures ensured some stability in the system for a couple of months, Ms Banerjee’s consistent refusal to take concrete steps to improve revenue earnings may lead to a virtual collapse of the administration, observers fear, in the months ahead.

To begin with, not a single major industrial house has come forward to announce new investments. This has happened largely because of the Trinamool Congress’s (TMC) image as an industry-unfriendly, especially after the pullout by the Tatas from the proposed Nano car project. Ms Banerjee’s repeated announcements that her government will not even help investors acquire “even an inch of land” for their proposed projects has not helped matters. Nor has her refusal even to discuss this official decision with investors who sought clarification repeatedly.

This hurts Bengal’s economy in two ways, First, it jeopardises her main pre-election promise of creating “lakhs of new jobs”. Second, without major corporate investments and projects, official revenues do not increase.

Despite the insistence of Mr. Mukherjee and international financial institutions like the Asian Development Bank and others, Ms Banerjee has so far not agreed to introduce new taxes which might have bolstered the state exchequer. The state’s indebtedness to the centre amounts to nearly Rs 200,000 crore. As things stand, there are no signs that the debit position would improve anytime soon. Reports in the local media suggesting that the government may find it difficult to fulfill the salary and allowance requirements of its employees from Jan 2012, amounting to Rs 2700 crore monthly, have not inspired general confidence in the TMC-led Government. While sales tax and excise duty collection has registered a 19% growth, reaching Rs 8642 crore by Aug end, the official target is to increase this by 30% at least.

The government has affixed a tax revenue target of Rs 27,690 crore for 2011-12 fiscal, but observers fear that unless more steps are taken, the actual collection may well be around Rs 21,000 crore leaving a major shortfall. And the state will not be able to finance most of the “development programmes and projects” announced by Ms Banerjee for backward or minority areas. Even providing jobs for the 100,000 people or so, as announced by her, including 40,000 new jobs for teachers, will remain valid only on paper. Ms Banerjee is following the same populist policies she followed during her tenure in the railways as a Union Minister. For some years she did not allow any increase in passenger fare, following her predecessor Mr, Lalu Prasad Yadav’s example. The fact that this myopic approach left a large hole in the Railways finances is a problem that has hit her successor Mr. Dinesh Trivedi directly, as he attempts to pick up the pieces.

He is mulling an immediate increase in passenger fare, it is reported. Similarly, despite price increase in petrol, coal and other fuel, she did not allow any increase either in power tariff, nor in bus, minibus or taxi fare, despite much pressure. Transport operators have threatened to strike, while Power department sources fear an imminent breakdown in services within next few weeks, unless the government announces some financial relief for the thermal plants.

To revert to the question of investments, the lack of response from industry to invest in the state has forced the government to rely more on the implementation of the NREGA scheme as widely as possible in the districts. Also, efforts are on to recover land taken by investors who have not yet started their units and to hand them over to those willing to set up units immediately, especially in the small sector. The argument is that this sector provides maximum jobs. The government has also cut down on the bureaucratic tangle governing investment proposals, and reduced the number of official forms to be filled by entrepreneurs from 95 to 15 and proposes to reduce it even more.

Meanwhile, investment of thousands of crores of rupees in urban development projects by the ADB and others, have been held up as the government, unlike any other Indian state, has refused to introduce a water tax. (IPA)