West Bengal government reduces stamp by 2%
10 Jul, 2021

West Bengal government reduces stamp by 2%

On Wednesday, the West Bengal government waived road tax on passenger transport vehicles and offered a reduction on stamp duty as it presented a Rs 3.08 lakh crore budget in the state assembly for the financial year 2021 – 2022.

While presenting the budget, state industry minister Partha Chatterjee announced the government has decided to extend the one-time exemption of motor vehicle tax from 1st July 2021 to 31st December 2021.

Further, the government has also proposed to decrease stamp duty by 2% for registration of deeds, while the circle rate was reduced by 10%.

Partha Chatterjee presented the budget as finance minister Amit Mitra is unwell.

In his budget speech, Chatterjee said the state had fully provided for debt servicing in its budget. He claimed that the debt to GSDP ratio for West Bengal at 35.54% is far lower than the Centres debt to GDP ratio.

According to the financial statement given at the end of the budget, compared to last year’s actuals, the budget also pushed up the states annual budgeted borrowing by over 23% to a record Rs 1,15,819 crore.

Devdutta Basu, a well-known financial analyst, welcomed the stamp duty reduction being a boon in the current depressed times also cautioned that the “states debt is going up debt reduction should be a priority.”

According to the financial statement for 2021-22, the expenditure on budgeted debt servicing and loan repayments went up by approximately 20% over last year’s actuals which according to financial analysts, represents an attempt to retire older high-cost debt by the state government.

The government’s revenue expenditure has also gone up from a little over Rs 1.8 lakh crore to over Rs 2.13 lakh crore, factoring in spending on new schemes.

In February, Chief Minister Mamata Banerjee had placed the vote-on-account in the House, during which 26 schemes and projects were announced.

The student credit card scheme was launched on June 30. Chatterjee said an interest rate of 4% will be charged, while the rest will be borne by the government as a subsidy. No collateral will be required for availing of the scheme, and the loan amount will be fully insured and state guaranteed.

He added that the state government is going to launch a West Bengal basic income scheme christened Lakshmir Bhandar’ (Lakshmis Gift) to support a woman member of every household. Under this scheme, Rs 1,000 will be doled out to women of SC/ST households and Rs 500 to those belonging to the general category.

The government will transfer the money directly to their bank accounts, he said.

Chatterjee noted that farmers have started receiving benefits from the Krishak Bandhu scheme.

He said that the government’s ‘Duare Ration’ (Ration at doorsteps) scheme under which food grains are delivered to households — will be scaled up in days to come.

The industry minister, during his speech, also proposed allocation for major departments for the ongoing financial year, with health and school education getting a substantial part of the pie.

The key highlight of this initiative is the 2% reduction in stamp duty, a move that is poised to make a considerable impact on the overall cost of property transactions. This reduction comes at a time when the real estate sector is grappling with challenges, and the state government’s proactive stance is likely to stimulate demand and encourage investments.

In addition to the cut in stamp duty, the government has also taken a bold step by slashing circle rates by 10%. Circle rates, which serve as the minimum valuation for property transactions, play a crucial role in determining the overall cost of property deals. The 10% reduction is a strategic measure to align property valuations with market realities, making real estate transactions more feasible for both buyers and sellers.

This move is anticipated to have a cascading effect on the real estate market, leading to increased property transactions, a surge in homebuyer confidence, and a potential boost to the construction industry. By aligning circle rates with prevailing market conditions, the government aims to strike a balance that encourages economic activity in the real estate sector without compromising on revenue generation.