It hasn’t been a good year – rather, two years – for West Bengal finance minister Amit Mitra. It was only in August 30 last year that he was assigned by Mamata Banerjee to head a group of ministers tasked with putting Haldia Petrochemicals Ltd back on its feet, but all his brainstorming couldn’t haul the long-troubled PSU out of intensive care. An unflappable institution, the State Bank of India, did, after installing its nominee on the HPL board and, together with the Punjab National Bank, superinfusing it with Rs 116 crore. And saving Mitra’s rep as a finance whiz.

But the West Bengal government still means to dump its 40 percent stake in HPL: Banerjee’s signature non-developmental extravagances have forced it into unexpected caution; and driven Mitra to defend her impetuosity with a folderol FY13 budget designed to maybe shock and hopefully awe the rural electorate whose block vote during the coming panchayat elections is paramount to the Trinamool.

The problem for Mitra is that he made a bad job of it, possibly because he was caught between a rock (Banerjee) and a hard place (zero finmin rollercoaster experience). Although this former Ficci secretary-general embraced Banerjee’s hammy socialism seemingly without a moment spent in resetting his ideological GPS, it still fazed people that he began his March 21 budget speech with an insupportable calculation using a version of the Keynes multiplier formula whose variables only he seems to know.

Mitra declared that the Rs 22,000 crore of interest and debt principal repaid to the centre (FY11), on which Banerjee had demanded a three-year running moratorium, “if available for government expenditure for developmental purpose could have created as much as Rs. 88,000 crores of gross state domestic product (GSDP) as per the Keynesian multiplier”. The truth is, whatever version Mitra employed – Keynes’ own ‘Great Depression’ 1936 General Theory model, Paul Samuelson’s influential 1939 reworking, any post-2009 Great Recession model – not one increases Rs 22,000 crore fourfold to add to the existing GSDP; and with no help from a complementary tax cut multiplier (because Mitra has not only not cut taxes, he has actually increased VAT across the board). The gently argumentative CPM leader of the opposition, Surjya Kanta Mishra, chose to not put it on record – but Mitra’s Keynesian Kalkulation is bunk.

The applauding ghost of Keynes notwithstanding, in 2012-13, West Bengal’s loan repayment will rocket to Rs 25,195 crore; and in 2013-14 to Rs 28,318.68 crore, with debt bloating to Rs 2.47 lakh crore – up Rs 49,000 crore from the Rs 1.98 lakh crore debt that Banerjee inherited in FY11 from the previous Red government, and up Rs 38,620 crore from the FY12 debt of Rs 2,08,380 crore.

And these are just projections – part maths, part wishful thinking – meant to be revised – and revision came swift and fast: The state’s net revenue deficit went berserk, surging from Rs 6,976.01 crore in Mitra’s FY12 budget estimate to Rs 13,308.10 crore in this year’s ‘revised’ estimate. (Not in recent memory have revisions in national or state budgets – any state – crossed 20 percent, leave aside almost doubling.) Stranger still, Mitra couldn’t explain how he calculated an FY14 revenue deficit of Rs 3,488.49 crore – a quarter of the FY13 deficit – despite the state government’s ongoing splurge funded mostly by market borrowings.

Some economists and senior finance bureaucrats are quietly convinced that Mitra has shown himself to be the least capable, most counterfactual and, potentially, the most ruinous finance minister in the state’s history. “He is not even a good accountant,” said a Writers’ Buildings Big Babu. “Or he would at least know how to fudge the figures without leaving a trail a first-year commerce student can follow.”

An economist said, “He has three more budgets to prepare. Three. And he has already lost the plot at number two. We all know the magnitude of upward revision that the 2013-14 deficit will call for – since it will be way greater than his absurd projection and substantially more than FY13’s. What none of us knows is how Mitra will handle it with a straight face.”

A longstanding advocate of ruthless anti-deficit measures, Mitra seems to lack a nummermeister’s basal understanding: that finance ministers are for running a state, and chief ministers are for showboating. It’s no secret that Bengal’s engine is running on fumes. But Mitra chose grandstanding over reflection when he increased the plan outlay by 14.12 percent to Rs 26,674 crore, promising to make it doable with a 22.8 percent hike in ‘own tax’ revenue – never mind that the numbers don’t mesh.

Then, again, he aimed his budget speech at rurals who his boss wants in the Trinamool’s electoral corral, not at his political and intellectual peers who, expectedly, shredded the 57-page budget document and his 45-minute speech, which was partly ad lib and had respectful obiter dicta to Rabindranath Tagore, Mirza Ghalib and Swami Vivekananda, none of who knew anything about economics. And to Keynes, Paul Samuelson and Milton Friedman, who did.
He was “proud to say” that undaunted by debt repayment of Rs 25,000 crore, the state government had paid out Rs 42,000 crore in salaries and pensions. It did – but by monthly market borrowings of Rs 1,000-1,500 crore and blowing through half its borrowing limit of Rs 22,821 crore by September 2012.

Meanwhile, the allocations to various departments seem like a bipolar optimist’s take on revenue collection: Rs 90 crore to the tourism department, a 104 percent hike; Rs 1,938.08 crore to the departments of irrigation & waterways and water resources investigation and development; Rs 1,049 crore to the health & family welfare department; Rs 2,713.05 crore to the school education department; Rs 444.24 crore to the technical education and training department; Rs 1,015.32 crore to the department of women & child development and social welfare; Rs 800.09 crore to the public health engineering department; Rs 375 crore to the transport department...

It’s fairly cut and dry – but even cabinet colleagues are undecided on the quality of number-crunching. The cabinet’s contradictions came to light when the ‘Economic Review’ (ER), collated under the aegis of industries and parliamentary affairs minister Partha Chatterjee, openly contested Mitra’s stats: Mitra had claimed that since May 2011, 257 units had invested Rs 1,12,769.36 crore in the state; according to the ER, investment realisation in FY13 was Rs 312.24 crore, a microscopic speck 360 times smaller than Mitra’s figure. Chatterjee finally apologised and upheld Mitra’s numbers – after Mamata Banerjee blew a fuse – and blamed the massive disparity on “lack of interdepartmental coordination”. But Writers’ scuttlebutt has it that given Chatterjee’s animus against Mitra, who is frustratingly non-confrontational, this was a disaster waiting to happen.

In the run-up to critical elections, numerical gaffes the size of billboards are an opposition’s windfall. Surjya Kanta Mishra, whom Mitra had derided after his budget speech as a mere (medical) “doctor” who wouldn’t understand Keynesian economics, gleefully nagged away when Chatterjee informed him that in the 10 months of March 1-December 31, 2012, “private investment proposals have amounted to Rs 8,507.72 crore, of which Rs 2,108.14 crore have already been realised”. In that case, Mishra told Chatterjee, investment proposals over the remaining 12 months of Trinamool rule (of 22 months, to date) must amount to Rs 104,261.64 crore – a preposterously large monthly average of Rs 8,688.47 crore. Chatterjee wouldn’t take the bait, but Mishra had made his point: the budget stats were fried.

This fiasco originated in Mamata Banerjee’s triumphal delirium in mid- to end-2011, when she promised the stuff of dreams to industry and mati-manush alike, and tycoons from all over India entered into industrial entrepreneur memorandums (IEM) with the Trinamool government of a staggering Rs 3.03 lakh crore. West Bengal hadn’t received so many proposals since 1992: If actualised, they would have given employment to about 43,500 people. As Banerjee’s ma-mati-manush vision unfolded, however, 102 of the 135 IEMs were ditched; 33 IEMs were quietly absorbed.

That year, according to the union commerce ministry’s department of industrial policy and promotion’s 2012 report on India’s industrial health, West Bengal ended up with new investment of a piddling Rs 325 crore – or 7 percent of the proposals. It is likely that the stats in the ER ran close to the truth: Rs 312.24 crore is a mere 4 percent less than Rs 325 crore, and mirrors the investment paralysis on the ground, with industrial investment limited to captive PSUs strong-armed into expanding capacity.

But, said a state finance bigwig, “Look at it another way. If, in 2011, Rs 3.03 lakh crore of proposals came to a realised Rs 325 crore of investment, it would be ungenerous of us to deny that Rs 104 lakh crore of proposals in FY12 could, theoretically, lead to Rs 312 crore being realised. It’s a 33 percent increase in success rate over 2011.”

“Not that,” he added, “I would advise building a castle based on this conjecture.” Conjecture? “To be honest, yes. How could anybody dig out the precise figures? The minister [Partha Chatterjee] has made the directorate of industries [which collated the ER stats] off-bounds for everybody.”

Chatterjee wasn’t the only Trinamool senior who took issue with Mitra’s submissions of horizon-to-horizon success. State agricultural minister Arup Roy told the assembly on March 19 that the government intended to issue fresh tenders, because, Mitra’s claims notwithstanding, work was still far from over on establishing 95 ‘krishak bazaars’ in 95 districts (with a sanctioned amount of Rs 536.60 crore): In fact, tenders for 45 krishak bazaars had found no takers. Mitra had also announced that construction of five new ITIs was finished: state technical education minister Ujwal Biswas countered crossly that while work on 13 ITIs was ongoing, not one had been completed between June 1, 2011 and January 21, 2013.

Aside from the ignorance of the rural voter, during his budget speech, Mitra banked upon that age-old weapon of mass distraction – inessential scholarliness: he referred to the “Keynesian multiplier effect” to explain why his increase of VAT by 1 percent wouldn’t hurt the manush of the mati, and to Paul Samuelson and Milton Friedman to explain everything else. The name-dropping blitz saw the opposition benches glazing over, until Surjya Kanta Mishra snapped out of catatonia and spent a few excitable minutes in a bhadralok intellectual gabfest with Mitra – after which Mitra, by then singed by Mamata Banerjee and Partha Chatterjee’s glowering disapproval from the row behind, told Mishra that he was out of his depth.

Blessed by St Keynes or no, Mitra’s house of stats will stand or implode depending on how long he is willing to dissimulate in the service of the Mamata Doctrine of Infallibility. A sign of his tensile strength lies in a small statistical twist. Last budget, he estimated own tax revenue (OTR) collection at Rs 31,222.25 crore; this budget, his revised estimates came to Rs 32,405.21 crore – 30 percent more than in 2011-12. But Mitra chose caution over exhilaration and limited the OTR estimate for next year at a sober 22.8 percent over this year’s.

Of course, no one knows better that a chunk of FY13 revenue came from the state government’s reimposition of octroi, a one-time hike in electricity duty, an increase in coal cess, serial fuel price hikes (which provided the state government a tidy bit of tax), an alcohol price increase (coupled with the government’s sly, unpublicised decision to allow some liquor off-shops to operate as on-shops and to expand bar timings, bringing a windfall in one-time fees and more tax), and stamp and registration fee on real estate. These seven factors together brought in Rs 4,769 crore, or nearly a seventh of revenue collected.

Another reality-check indicator is that while the state ranked fourth in revenue growth between 2006-07 and 2011-12, it has simultaneously topped the revenue deficit graph since 2007. The 13th finance commission’s report on projected OTR of the states during 2010-15 cautions that West Bengal will slide to a ranking of 7 in a list topped by Maharashtra, whose collection rate the 13th FC projects as more than 2.5 times that of West Bengal’s. In 2011-12, West Bengal’s GDP per capita was below the national average, ranking it 14 in the states’ list.

For all Mitra’s ambition to cut the FY14 revenue deficit by about Rs 10,000 crore compared to this year, there are global institutions that see no marked upswing in Kolkata’s – and, by extension, West Bengal’s – future. The November 2009 PricewaterhouseCoopers UK’s Economic Outlook report concluded that in the global city GDP rankings 2025, Mumbai would shoot up from 29th to 11th, Delhi from 37th to 19th – and Kolkata from 61st to 37th. Also, Kolkata, projected to become the world’s eighth-largest megalopolis in 2025, doesn’t even make it to the GDP Top 30, where both Mumbai and Delhi find respectable rankings.

This stoic realism – which isn’t necessarily cause for gloom – has been lacking in both of Mitra’s budgets, which is perplexing because nothing in his exalted CV suggests anything other than the priceless dispassion of the macroeconomist. While he admitted that industry’s contribution to the GSDP had slipped to 18.8 percent in FY12 from 19.1 percent in FY11, he couldn’t bring himself to concede that West Bengal might need a firm corrective hand. For instance, given industry’s enduring investment wariness, it seems hardly notable that industrial manufacturing dropped one step from 56 percent to 55.3 percent – but the disquiet lies in the detail: two-third of Bengal’s GSDP is now a spreading monopoly of the largely unpoliced, unlegislated services sector, whose collateral victim is not industry but agriculture, Banerjee’s pet mati-manush. At 16.9 percent, Bengal agriculture’s contribution to the GSDP FY13 is half its FY12 contribution of 38.3 percent. Add to this the fact that the state, along with the Andaman & Nicobar Islands and Sikkim, attracted a pathetic 1 percent of FDI between 2000 and 2012 - and it’s suddenly evident that the increasing fragility of agriculture, in the only state in the country that actually empowered marginal farmers and sharecroppers through a radical land redistribution programme, means big trouble. Nor does Bengal have a safety net for the tens of thousands certain crumble before an expansionist services sector: The state’s negligible per capita social sector expenditure from 2007-08 to 2012-13 ranks it at third among the Bottom 5 states; the SSE component of its GSDP slumped from 7.1 percent (FY12 revised estimates) 6.6 percent (FY13 budget estimates).

All this is evidence of the hollowness of what Banerjee considers among her most progressive ideas: the setting up of a krishi utpadan kendra (agriculture production centre) in each of Bengal’s 341 blocks. The main objective of the kendra: to house the ‘single-window system’ for farmers proposed in September 2012 (and scheduled for kickoff in October 2012). Banerjee means the windows to be interfaces between farmers and the seven departments that handle, with no particular coordination, the giant post-Operation Barga agricultural mess. With her usual disregard for structural coordination, Banerjee wants hundreds, maybe thousands, of officials from the marketing, horticulture, food processing, water resources, fisheries, animal resource development and irrigation departments, banks and insurance companies providing rapid-fire information to farmers on central and state schemes, credit, crop insurance, animal and plant diseases, fertiliser, soil health, agriculture infrastructure and marketing.

No one’s told Didi why this scheme is almost six months behind schedule – that it’s a bureaucratic nightmare and cash-suck, and could potentially crash the system in the frenzied run-up to the 2016 assembly elections. But an idée fixe is at work here: with one eye on the panchayat polls and another on cornering every last rural vote, Banerjee has been setting the stage for months now, over-empowering block development officers by diktat, transferring the obstinately scrupulous ones on punishment postings – 19 BDOs as recently as March 21, for raising procedural issues relating to agricultural scheme beneficiaries cleared by her ministers.

Mitra’s numbers-challenged but confidently-articulated budget, Mamata Banerjee’s “shob cholbe” (everything goes) impulse, and a cabinet packed with partymen scared to offer a word of corrective criticism or opinion could add up to Mitra needing to do some extraordinarily creative accounting in the next budget. Bengal is in for grief if he does, and grief if he doesn’t.

(This story appeared in the April 16-30, 2013 issue of the print magazine)