Corporate Apr 25, 2013
The West Bengal government on Wednesday announced that it will set up a Rs 500 crore relief fund for compensating depositors who have lost money by investing in chit funds run by the Saradha Group.
But who's going to pay for it? Smokers.
"Although I do not want to do this, I have no option other than raising taxes on tobacco," Banerjee said. The chief minister was apologetic as she announced a 10 percent additional tax on cigarettes, suggesting, with the hint of a smile, that people could smoke more for a few days to help raise the money sooner. "Smoke a little more to help the investors," she told reporters today.
Mamata's detractors have slammed the move asking why the tax payer should pay for the fraud. They suggested, instead, that the money be taken from Saradha group boss Sudipta Sen, who was produced in a Kolkata court this morning.
However, the CM justified the move by saying the tax component in West Bengal is only 25 percent, compared with 50 percent in Rajasthan and Uttar Pradesh.
An estimated Rs 150 crore of the relief fund will be raised through an additional duty on tobacco.
"We will tap other sources to get the rest of the amount... This will help the common people who are now in distress," she said, denying that her party, the Trinamool Congress, encouraged or exploitedSudipta Sen, the man who ran the chit fund scheme that went bust in West Bengal last week.
But how will the state government get the remaining amount of Rs 350 crore? Well, itis yet to decide.
But even if the government manages to set up the Rs 500 crore fund, it won't be enough for the investors, noted Business Line.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.
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