Kolkata: With an eye on the 2018 panchayat election, West Bengal chief minister Mamata Banerjee on Monday announced farmers in the state will not have to pay tax on agricultural land, a move that will benefit over seven million families, albeit in a small way.
Starting her tour of the western districts at Kharagpur, the chief minister said the move was aimed at helping farmers recoup their losses from the cancellation of high denomination notes.
However, Madhura Swaminathan, a professor at Indian Statistical Institute, Bangalore, described the move as only a “feel good gesture” which is unlikely to have any significant implication for farm income in West Bengal.
The real challenge for Indian farmers is “income squeeze” in the wake of drought and rising input costs, according to Swaminathan, who specializes in rural development and agriculture.
Most states levy “very small taxes” on agricultural land—small farmers typically pay a few hundred rupees a year, Swaminathan said, adding that the financial implications of waiving the tax are insignificant.
At least 95% of the people dependent on agriculture in West Bengal are small and marginal farmers, according to the state’s own estimates. A little over 5 million hectares are under cultivation and average land holding in the state is estimated at 0.77 hectares.
From Monday’s announcement, it appears that tax on farmland has for now been abolished in the state, according to key government officials. The state will lose around Rs200 crore of revenue, they added, asking not to be named.
To be sure, the administration in West Bengal, even under the Left regime, has always been lenient with collection of taxes from farmers.
Monday’s announcement is a sign that Banerjee is “running out of ideas in a maintaining her pro-poor image” in the face of the Bharatiya Janata Party making inroads into the agrarian community, said a Left-leaning economist in Kolkata.
Banerjee’s government had promised many measures to shore up farm income, but has delivered nothing substantive yet, this person added. He, too, asked not to be identified. “I am not surprised that she has now turned to handing out small changes,” he said.
