Centre working on financial package for Bengal: report

Although West Bengal chief minister and Trinamool Congress chief Mamata Banerjee has rescinded her threat of pulling her party out of the coalition UPA government at the centre if the recent hike in petrol prices is not rolled back, her demand for a greater say in union government decision-making and a Rs19,000-crore financial package for her state has got the union government in a bit of a tizzy.

She has also threatened to pull out of the UPA if there is any further hike in the prices of petroleum products – petrol, diesel, cooking gas, and kerosene. This would cripple the union government, as it would be hard put to it to muster a majority if the Trinamool withdraws from the coalition.

Her threats have thrown the government in a bit of a dither; and according to a report, a financial package is being worked out for the cash-strapped state, though the size is sa yet unclear.

Banerjee says she inherited a treasury which was in a shambles and her government is finding it difficult to pay salaries to large sections of its employees.

The fiscal package being considered by the UPA government for West Bengal will not be a one-time payment but phased over a period of time and carrying riders, officials said, according to a ToI report. An official said similar packages would be considered for Kerala and Punjab.

The Bengal package would be decided after finance minister Pranab Mukherjee meets the prime minister.

But the central government is itself not cash-rich. "It is not easy. There are discussions going on. This is a very tight fiscal year and we have to see what we can do and how we can do it. Various options are being examined," said another official, according to the report.