Even as growth has been impacted due to the Covid-19 pandemic, Tripura Finance Minister and experts said that better GST collection and efficient resource mobilisation would boost the economic situation or at least normalise the position.
The latest report of Tripura’s Economic Review (2019-20) said that the average annual growth rate in real terms or constant prices of the Net State Domestic Product (NSDP) for 2018-19 was 11.3 per cent. The growth rate declined in 2019-20 to 9.6 percent and is expected to further reduce to 5.9 per cent due to the lockdown and slowdown of the economy because of Covid-19 in 2020-21.
The report said that the expected growth in Per Capita Income is also affected due to the lockdown and the slowdown of the economy.
“Tripura has opportunities to augment investment from neighbouring country Bangladesh for further generation of income and employment opportunities,” the Economic Review said.
It said that the various flagship programmes and central sector schemes along with more private sector investments especially in agriculture, horticulture, fisheries, animal husbandry and forestry will definitely enhance production and the income of the people in Tripura.
Tripura Deputy Chief Minister Jishnu Dev Varma, who holds the finance, power and rural development portfolios, said that the state is currently in a comfortable position economically.
He said that the budget session of the Tripura assembly will begin on March 17 and a growth oriented budget for the 2022-23 fiscal year would be tabled in the House.
“Our government (BJP govt) had begun in March 2018 with a huge debt burden left by the previous Left government but with efficient resource mobilisation and better tax collection, the health of our economy is now much better compared to four years ago,” Dev Varma told IANS.
Writer and economist Sekhar Datta said that saddled with a big debt burden and interest payment liability exacerbated by reduced devolution from the Centre, the Tripura government is planning to enforce a slew of cost control measures to keep the finances of the government steady.
He said: “As it is, the government had inherited a debt burden of Rs 11,000 crores from the previous government after coming to power in 2018 but over the past four years the debt burden rose sharply up to Rs 17,000 crores till March last year and if anything, this has risen further over the past year.”
Datta told IANS: “Ahead of the budget session of the state assembly a high level meeting to take stock of the FRBM (Financial Responsibility and Budget Management) was held earlier this week as per the central act of 2003 and an alarming picture emerged. What has rattled the financial administration of the state is the fall in devolution of central funds on grants-in-aid and even on centrally sponsored schemes.”
According to an action programme finalised in the recent meeting, the state government will curb expenses on many heads through specific measures, he said.
According to Datta they include austerity measures, avoidance of land acquisition for projects, outsourcing of service personnel should not be excessive, existing manpower for the same job to be declared surplus, mobilisation of extra-budgetary resources including off budget borrowing, revenue generation areas would be expanded.
Tripura University’s (central varsity) Economics Department head Professor Indraneel Bhowmik is very optimistic about an improving economic situation in Tripura in particular and in the country in general.
“As the GST collection was better in recent times in the country, all the states including Tripura would be benefited with this positive development. More allocation in capital expenditure by the government would boost growth,” he told IANS.
Bhowmik, however, said that if the Russia-Ukraine conflict continues instability would also persist. The world economies will be affected including India.
Tripura University’s Economics Department Professor Dr Salim Shah said that prices of essential commodities even in the rural areas have increased manifold leading to harder living conditions for the common men.
“The unemployment rate increased hugely, economic activities slowed down and there is no clinical symptoms of better health for the economy during the Covid pandemic crisis period,” Shah told IANS.
He said that agriculture is the prime growth sector till date, then electricity, gas and water supply, then construction. Services and trade are in a poor state till date.
“Growth rate of agriculture,forestry and fishing was 13.72 per cent in 2018-19 over 2017-18 and it has been maintained in 2019-20 at 13.87. However, the rate declined to 12.41 in 2020-21.
“The growth rate of secondary and industrial sector has continuously declined during the last three years — from 15.86 per cent in 2018-19 over 2017-18 to 13.96 per cent in 2019-20 to only 8.57 per cent in 2020-21.”
Shah said that for trade, hotels and restaurants, growing sectors in Tripura in the recent past when the state started getting importance as an international business corridor, the growth picture is really gloomy for the last 3 years — with growth rates of 12.52 per cent in 2018-19 to 11.13 per cent in 2019-20 to 5.10 in 2020-21.
The opposition Left parties however, blamed the state government for the deteriorating Tripura economy through bad governance and economic mismanagement.
The previous Left Front government’s Finance Minister and veteran CPI-M leader Badal Chowdhury said that the BJP government as part of its economic mismanagement has incurred huge expenses in the non-productive sectors.
“Tripura (during the Left regime) was first among the few states in India that had enacted the FRBM. The Left Front government was always careful in curbing wasteful expenditure and had taken a series of measures to generate revenue without burdening the people,” Chowdhury told IANS.
An official document said that agriculture and allied sectors have been playing a pivotal role in the Tripura economy.
There has been a continuously declining relative share of the industry and secondary sector over the years. Relative share of the secondary sector to the state’s Net State Domestic Product (NSDP) has come down to 12.8 per cent from 24.1 per cent during the period from 2006-07 to 2015-16.
The composition and dynamics of the Gross State Domestic Product (GSDP) also reveal the concern over employment generation and accommodation of the educated youth in gainful economic activities.
The adverse process of development of the state is well reflected through the respective compound annual growth rate of the various sectors — 18.7 per cent for the primary sector, 10.6 per cent for the tertiary sector and 5.3 per cent only for the industrial sector during 2006-07 to 2015-16.
(Sujit Chakraborty can be contacted at sujit.c@ians.in)
