West Bengal government reduces stamp duty by 2%; slashes circle rates by 10%

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 state government also increased outlays in many sectors. The departments that saw a sharp spike in allocation were Health, Home and Hill Affairs, Disaster Management, Education and Women and Child Development in the wake of several targeted schemes announced by the state.

Home and Hill department allocation was Rs 11,939 crore in 2021-22 as compared to Rs 1299 crore in last year which is nine times jump. Disaster management allocation jumped to Rs 2,105 crore compared to mere Rs 215 crore in 2020-21, representing a 10-fold jump.

The Bengal government also increased the health allocation by over 400 per cent to Rs 16368 crore to tackle the Covid-19 pandemic effectively as compared to the Rs 4608 crore allocation done in the previous budget.

Allocation in the food and supplies department expanded by around 50 per cent to Rs 12293 crore.

West Bengals business chambers and industrialists welcomed the budget. The budgetary stimulus provided to industrial sectors would help navigate the pandemic hardships successfully, CII vice-chairman (Bengal ) Subhasendu Chatterjee said.

Bharat Chamber president Ramesh Kumar Saraogi welcomed the continuity maintained by the State Government in undertaking the socio-economic development programmes.