The Congress government in the Union Territory on Monday presented a Rs. 6,665 crore tax-free budget for the fiscal 2016-17 and slashed the value added tax on LED bulbs, e-rickshaw, battery-operated cars, sanitary napkins, besides exempting equipment procured by the local administration department for the Swachh Bharat Mission, ‘power tillers’ used by farmers and helmets.
Presenting his maiden budget amid a boycott by opposition AINRC and the AIADMK, Chief Minister V. Narayanasamy said the budget size has been fixed at Rs. 6,665 crore of which Rs. 4,100 crore will be under non-plan and the remaining under plan head.
The government has decided to slash the VAT on LED bulbs from 8 per cent to 2 per cent and e-rickshaw, battery operated cars and sanitary napkins from 14.5 per cent to 2 per cent, Mr. Narayanasamy said.
The government has also decided to reduce the existing guideline register value used for collection of stamp duty by 25 per cent.
Giving an overall picture of the Union Territory’s financial situation, he said the outstanding loan as on March 31, 2016, stood at Rs. 6,651 crore and annually the territorial administration makes payments to the tune of Rs. 700 crore towards principal and interest amount.
Since the gap on borrowings for every year has been fixed by the fiscal road map approved by the Union Government, the administration will not be able to borrow more than the prescribed limits for any new development schemes.
The implementation of the 7th Central Pay Commission recommendations will require nearly 45 to 50 per cent of the budget for salary, allowances and pension, he said.
The Union Government had substantially reduced non-plan and plan grants. The non-plan gap has remained static at around Rs. 500 crore for a long time, though the UT incurs additional expenditure on account of dearness allowance and bonus.
“If steps are not taken to rectify the loss incurred by the previous government, it will be hard to run various public sector undertakings, boards and cooperative societies. During the fiscal 2015-16, Rs. 656 crore, accounting for 11 per cent of the total budget, was released as grant-in-aid to these statutory bodies which are having around 13,500 employees. Profit-making undertakings have fallen into the red due to complete mismanagement by overstaffing against rule,” Mr. Narayanasamy said.
The government will have to raise internal resources to improve the financial situation. The Commercial Taxes Department has taken necessary steps to roll out the Goods and Services Tax (GST) from April. As the registration of dealers under the GST regime was based on the Permanent Account Number, the PAN of registered dealers had been collected and 99 per cent of these had been validated.
Necessary infrastructure will be put in place within the time frame for smooth transition to the GST regime. Fifteen officials from the department have been deputed to undergo ‘trainers training’ at Chennai and Thiruvananthapuram. The government also proposes to set up a 24-hour help desk to assist dealers for hassle-free transition to the GST.
As a major revenue earner, the department has collected total revenue of Rs. 1,439 crore during the last fiscal in spite of the steep fall in prices of petroleum products. The government has set a target of Rs. 1,600 crore, the Chief Minister said.
