Mamata Banerjee Criticizes Union Budget as "Economic Jugglery" Amid Concerns Raised by IMF

Citing a recent International Monetary Fund (IMF) study that highlighted doubts about the official estimates of the GDP, inflation, and employment, Chief Minister Mamata Banerjee stated on Thursday that the Union budget for this year was an outright "economic jugglery" by the Narendra Modi administration.

"While the Union budget is a complete jumble of economic figures, we have provided a historic budget that is unrelated to elections. There's a suspect element, according to the IMF. One day the World Bank will say it," Mamata said during her 55-minute address on the Assembly floor about the state budget that Finance Minister Chandrima Bhattacharya had presented on February 8.


Economists like Arvind Subramanian, the former main economic advisor to the Center, have already expressed concerns about Mamata's lack of specificity in the IMF report.

The economic growth rate for 2023–2024 is predicted by the most recent advanced projections to be 7.3%, up from 7.2% in the previous year.

Subramanian said that nominal GDP projections showed a slowdown in the economy in 2023–2024.

According to predictions from the Central Statistical Office (CSO), the nominal GDP (at current prices) will be about 9% in 2023–2024. 2022–2023 had a 16 percent increase.

"According to official estimates, in 2023–24, the GDP deflator's value—which is supposed to reflect the rate of retail inflation—fell below two percent. But for the fiscal year 2023–2024, the monthly average consumer price index is increasing at a rate of more than 5.5%, according to economist Prasenjit Bose.

In November, the IMF made the following observation in its most recent Staff Report on India: "The deflation method used to derive value added still has some weaknesses." Additionally, the Wholesale Price Index (WPI) is used as a deflator for a wide range of economic activities, which causes the compilation of constant price GDP to depart from the conceptual requirements of the national accounts."

Economist Ashok Lahiri, a BJP Balurghat MLA and former economic advisor to the Centre, criticized the state budget, arguing that Bengal was in fiscal crisis and that things would grow worse if the state government kept spending heavily without a clear plan for raising income.

Mamata shot back, saying, "throughout Bengal, the anticipated GDP growth rate for 2023–24 is 7.65, whereas it is 7.3 throughout India. They dislike giving credit to their state. Bengal had a 7.2% increase in the index of industrial production (IIP) in 2023–24 compared to 5.8% across India.

In response to the BJP's allegation that Mamata used loans to fund humanitarian programs, she remarked, "They say we borrowed a lot.... Financial restraint was nonexistent when the Left was in power. We established fiscal responsibility and budget management, or FRBM, and we are not allowed to take on more debt than we can handle. This is responsible money management."

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