Freebies won't lead to sustainable growth: Top economist on Bengal budget

The West Bengal Budget for 2023-24 was "full of announcements, which can be misleading", said senior BJP leader and noted economist Ashok Lahiri, underscoring that extending freebies will not lead to sustainable growth.

The TMC government is known for spending money on 'revdi' politics, handing out freebies which ultimately does not lead to sustained growth, he noted.

Infrastructure holds the key in West Bengal, but the roads here are in shambles, he alleged.

"The revenue expenditure in the current fiscal was Rs 8,000 crore more than what they had budgeted. Accordingly, the government had to spend much less on capital account. If not much is spent on capital account, how will roads, bridges and ports be built? Lahiri, also a member of the Fifteenth Finance Commission, underlined.

"The road infrastructure in West Bengal is in shambles. The NH-34, which connects Kolkata to Siliguri, does not look like a national highway, but resembles the streets of Bow Bazaar at times. Similarly, there are no deep sea ports, unlike other coastal states of the nation," Lahiri lamented.

The Bengal government had on Wednesday presented a Rs-3.39-lakh crore budget for 2023-24, with focus on farmers, the ailing tea sector and the state's potential to become a logistics hub.

Finance Minister Chandrima Bhattacharya said the state GDP is projected to grow at 8.4 per cent and the industry at 7.8 per cent this fiscal, both higher than the country's expected growth rates.

In an exclusive interview to PTI video, Lahiri said the Bengal government gives money under schemes such as Lakshmir Bhandar', stating that it would lead to growth in the state, but ours isn't a closed economy.

"What people spend here need not be on things that are produced in just West Bengal. The demand stimulation may result in growth elsewhere," he said.

Population density in Bengal is around 1,100 per sq km, which means "so many people and so less land", the economist said.

"The only solution for development, under such circumstances, is shifting people to industry, besides agricultural improvement. And, industrialisation cannot happen without solving the problem of land acquisition," he maintained.

Asked about the state government's initiatives to build an industrial hub, he said, "Foreign investments, the industrial hub becoming a part of the international supply chain, are all splendid ideas. However, if domestic industrialists are not setting up businesses here, there must be something wrong. Why are industries leaving the state or turning sick need to be answered."

Lahiri also stressed that welfare measures alone won't lead to growth and development.

"The main problem is that politicians would only do what it takes to get them votes. You need to provide welfare measures for the poor, but at the same time, there has to be a fine balance to ensure sustained long-term growth. The idea is not to give succour to the poor today, and then keep them poor.

"To me, the solution can come if three aspects are taken well care of --- education, health and infrastructure. The government, besides incurring expenditure for welfare measures, should also think of ways to deal with the whole problem of poverty, he added.