The Delhi Budget for 2010-11 was passed by a voice vote in the State Assembly on Monday after the opposition BJP walked out in protest against the proposed increase in Value Added Tax on various items and demanding restoration of the subsidy on domestic gas.
Earlier, wrapping up the debate, Finance Minister A. K. Walia announced a rollback of various VAT hike proposals announced in the Budget. He said the 5 per cent VAT proposed on CNG meant for transport now stands withdrawn. Similarly “rassi, ban and newar'', embroidery and zari items, motion picture distribution and plastic scrap and glass scrap have been exempted from the purview of VAT.
The Minister said the proposed increase in VAT from 5 per cent to 12.5 per cent on items such as “all other scraps'', tea, cocoa and coffee including coffee beans, all utensils and cutlery items (including pressure cookers/pans) except those made of precious metals stands restored to the original 5 per cent.
As for withdrawal of subsidy on domestic cooking gas, Dr. Walia said when on January 28 last year the Centre reduced the LPG price by Rs.25 per cylinder, the Delhi Government had not withdrawn the subsidy. But now, he said, it stands withdrawn. However, he announced removal of 4 per cent VAT from LPG because of which consumers would get a relief of Rs.12 per cylinder, which would now cost about Rs.310 each. The Minister also announced that the scholarships of Rs.50 for minority students announced in the Budget have now been increased to Rs.100 per student.
Briefing the media later, the Minister explained that the total budgetary impact of all these extra spending and lower revenue would be nearly Rs.200 crore. This amount would be raised through “better governance, increase in revenue through the Transport Department and with the cooperation of the traders, who had assisted in the increase in VAT collections in the past.” The diesel price raised in the Delhi Budget has not been tinkered with. Giving the rationale behind the increase, the Minister said the Delhi government was incurring a loss of Rs.350 crore on this head every year since 2006-07. Dr. Walia said Delhi also has the highest deviation, from the floor rate, on various taxes and the issue was raised at all empowered committee meetings.