Note effect on plan budget- sharp decline in revenue generation due to demonetisation

TT, Dec. 26: The Bengal government has started curtailing its plan budget following a sharp decline in revenue generation since demonetisation was announced on November 8, officials have said.

The sources said the first department to be affected was north Bengal development, which faced a cut of around Rs 200 crore in budgetary allocation for the current financial year.

According to finance department officials, the number of departments that will see a cut in budgetary allocation and the extent of the snip will depend on the Bengal government's revenue collection in the final quarter of the financial year, starting January next year.

"The state has seen a severe dip in revenue generation since early December. But the extent of it in the last quarter of the financial year is crucial. If the situation does not improve over the next few weeks, the plan budget of many more departments could face a cut," a finance department official said.

The sources said the Bengal government's revenue generation was Rs 5,260 crore lesser than what was estimated in early December. "The figure must have crossed the Rs 6,000-crore mark by now.... If revenue generation takes a hit, development is bound to be affected," the official said.

The Bengal government allocates funds to its departments under two heads - plan and non-plan.

The non-plan budget are used to pay salaries and meet other requirements to run offices. Plan funds are used in development projects and asset creation.

Sources said the decision to curtail the funds of the north Bengal development department from Rs 517.47 crore to Rs 313 crore had become a cause for concern for other offices.

"Lesser funds under the plan budget means lesser projects on the ground," explained an official of the public works department, which implements projects on behalf of several offices that do not have any engineering wing.

North Bengal development minister Rabindranath Ghosh, who held a departmental meeting in Siliguri recently, was believed to have told officials that the curtailment was the fallout of demonetisation.