At the India Today Conclave East 2018, Amit Mitra discussed the economic policies of the nation under the Modi government and explained its repercussion on states.

HIGHLIGHTS

• Amit Mitra accused Modi government of not acting with maturity
• Said government is reducing fuel prices because of elections
• Blamed untimely implementation of GST for decreasing exports

West Bengal Finance Minister Amit Mitra said that there is a sense of lack of trust within the central government which is taking big decisions without homework.

There is a sense of lack of trust within the government. It seems like the government is taking big steps without homework and not working as a team. They should make decisions after taking views from different people, Amit Mitra said.

At the India Today Conclave East 2018, Amit Mitra discussed the economic policies of the nation under the Modi government and explained its repercussion on states.

He accused the central government of not acting with maturity and said the government does not know how to govern strategically.

Amit Mitra has been the finance minister with the West Bengal government since 2011 and was the secretary general of FICCI for nearly 16 years before that.

Here is what Amit Mitra discussed:

On slashing of petrol and diesel prices

The central government announced a rate cut of Rs 2.50 per litre on diesel and petrol. Soon after, several BJP-ruled states also announced an additional relief by cutting the fuel prices further.

On being asked if the West Bengal government is also planning to cut rates, Mitra did not mention whether the West Bengal government will further cut the rates and discussed the Centre’s policy on petroleum instead.

The excise duty on petrol went up by Rs 10 per litre while on diesel it has been increased by Rs 11.77 per litre under the current regime. The question is whether the government knows how to govern, Mitra said.

He asked if the West Bengal government ever increased the taxes on fuel prices.

He said that the government needs to have a mature policy on petroleum and work on building petroleum reserves.

Amit Mitra said the US has 774 million barrels of reserves to be released in case of emergency and crude oil price rise. India should have built up reserves when the crude price was down to $30 per barrel. It was time for any mature government to build up reserves, Mitra said.

He said the in order to control the fuel prices domestically, the government should build reserves instead of cutting prices.

When the crude prices were down, why did they (Centre) not build reserves? Was it sleeping? It is a sleeping government. If we were at the Centre, we would have done exactly what I said, Mitra said.

According to Amit Mitra, the Centre has now suddenly reduced the prices before elections.

Petroleum products under GST

Currently, the petroleum products are not under the ambit of Goods and Services Tax (GST).

Replying to a question whether petroleum products should come under the GST regime, Amit Mitra said, In circumstances where GST regime is dysfunctional, bringing petroleum under it will be a mess.

A month ahead of the launch of GST in July 2017, I had told the government we are not ready for it. However, they still went ahead with it, Mitra said.

According to him, the states have suffered revenue loss of Rs 55,400 crore in the last eight months because of GST. The states lost Rs 43,000 crore last year due to GST.

He said the less developed states were suffering revenue losses because they lack basic information technology (IT) infrastructure.

The revenue of states such as Bihar and Odisha should have increased after implementation of GST because it is a destination based tax. However, there is a revenue loss. GST is not working in less developed states as these states have less developed IT structure, Mitra said.

Amit Mitra blamed untimely implementation of GST for decreasing exports as the exporters are not getting a refund of duties paid at the time of exporting goods.

Medium and small enterprises (MSMEs) that export leather goods, gems and jewellery are not getting refund resulting in a fall in their working capital, Mitra said.

On GDP, NPAs, CAD

The finance minister of West Bengal said that the total non-performing assets (NPAs) are above Rs 7 lakh crore and the NPAs rose in the last four years.

Current account deficit was 0.7 per cent in 2016. It has gone up to 2.30 per cent now. The International Monetary Fund expects it to go up to 3 per cent of the GDP. If you cross 2.50 per cent mark, it is damaging, Amit Mitra said.