West Bengal chief minister Mamata Banerjee’s compassion knows no bounds. She heads a bankrupt state that had to leverage her status as a valuable ally—when she was a UPA ally—to get extra funds from the Centre, but that hasn’t stopped her from promising to start a R500 crore fund for the smaller investors who had lost their life savings in the Saradha scam. On the auspicious day of Poila Baisak (Bengali new year, April 15), the chief minister shed tears when Tara TV anchors—Tara is owned by Saradha—first announced the group’s meltdown. She has now announced the state will buy out the Saradha Group’s television channels; indeed, the state has already paid R16,000 to each employee of the channels.
Fiscal purists will argue that a state with a fiscal deficit of 3.9% of GDP in FY12—it was 2.2% for all states taken together—can hardly afford to ratchet up more expenses when it has the highest level of debt in the country as a proportion of GDP. For FY11, the figure was 40.7% of GDP versus 23.8% for all states while for FY12 the revised estimates put it neck and neck with UP at 38.6%, versus 22.6% for all states—that’s why the state also has the highest interest payments in the country. Managing the debt, in any case, is the finance minister Amit Mitra’s problem—think instead of the TRPs to be gained when a large-hearted chief minister comes to the rescue of Tara TV’s employees.