New Delhi:
Amid an unsteady political equation with Mamata Banerjee, the government has cleared a financial bailout of Rs. 8,750 crore for West Bengal. The Cabinet Committee on Economic Affairs (CCEA) cleared the special package for West Bengal from the Backward Area Grant Fund.
The package comes days after Ms Banerjee forced the government to suspend its decision to allow 51 per cent foreign ownership in retail.
Ms Banerjee has 18 Lok Sabha MPs, making her a senior partner in the UPA. Her support is at this point critical for the government which needs to push important legislation through Parliament.
Five weeks ago, when the government hiked the prices of petrol, Ms Banerjee's party, the Trinamool Congress (TMC), made its anger known - not just because of the price rise, but because it says the Congress has got into the habit of not consulting its allies before taking key decisions. The TMC reiterated this accusation on the matter of reforms in retail.
The West Bengal chief minister had demanded a Rs. 19,000 crore package for the state. She had written to Prime Minister Manmohan Singh in July 2011, and met Finance Minister Pranab Mukerjee last month, seeking financial support for West Bengal's backward regions.
The state's debt grew from Rs 41,894 crore to Rs 1,91,835 crore, a jump of 457 per cent, between 2000 and 2011. In October this year, Ms Banerjee had told the National Development Council that the "12th Plan must look at a debt restructuring plan for West Bengal."