It’s not just the depositors in the collapsed Saradha chit fund who are paying the price for having invested in its schemes. Smokers in West Bengal are going to take a hit too.
West Bengal Chief Minister Mamata Banerjee on Wednesday announced that her Government would create a Rs 500-crore fund to provide relief to “small and medium investors” in the schemes operated by the Saradha chit fund institution.
An estimated Rs 150 crore of this will be raised through an additional 10 per cent duty on tobacco. The State government is yet to decide where the remaining Rs 350 crore will come from.
“Although I do not want to do this, I have no option other than raising taxes on tobacco,” Banerjee said at Writers’ Building here. She did not, however, give any time-frame for implementing the taxation proposal. According to her, the tax component in West Bengal is only 25 per cent, compared with 50 per cent in Rajasthan and Uttar Pradesh.
Cigarette prices moved up 15-20 per cent after the last Budget.
According to unofficial estimates, the Saradha group raised Rs 20,000 crore from West Bengal and the neighbouring eastern and north-eastern States.
Thus, the Rs 500-crore ‘relief’ may fall well short of the demand. Moreover, it will only be provided based on the recommendation of an inquiry commission, to be formed “soon”. “The relief will be given on a case-by-case basis based on the recommendation of the inquiry commission,” Banerjee said. The State government’s decision, however, raised eyebrows in legal circles.
Speaking to Business Line , Bikash Bhattacharya, former advocate-general of Tripura and a member of Opposition CPI (M), asked: “Why should the public bear the cost of ponzi scam. Moreover, how could they arrive at a figure of Rs 500 crore for relief? Is it enough?”.
Arunava Ghosh, another senior advocate and Congress member, feels the hike in the tax rate on tobacco would only lead to inter-State smuggling of cigarettes.
Banerjee, however, advised the Opposition to stand by the people rather than criticise her.
“We are not responsible for the scam,” she reiterated.