Maharashtra Deputy Chief Minister and Finance Minister Ajit Pawar presented an “aam admi” budget on Wednesday without hiking taxes on essential commodities in a bid to keep prices down, and announced a marginal revenue surplus of Rs. 58 crore. spares
Mr. Pawar in his speech which was shouted down by the Opposition, said that he had kept in mind the need to provide an impetus to the agriculture and industry sector to generate livelihoods. In the budget of March 2010, revenue receipts of the State were estimated at Rs 97,043 crore. However, considering the trends of revenue collection during the year, the revised estimates of revenue receipts was fixed at Rs. 1,07,159 crore. While revenue expenditure at the beginning of the year was expected to be Rs. 1,04,698 crore, in the revised estimates, this expenditure was fixed at Rs. 1,12,846 crore. As a result the revenue deficit which was pegged at Rs. 7654 crore came down to Rs. 5,688 crore, he said.
The Gross State Domestic Product (GSDP) at 2004-05 prices is expected to increase by 10.5 per cent during 2010-11 as against 8.7 per cent in the previous year. There was a 26 per cent increase in sales tax collection in 2010-11 over 2009-10 and a 31 per cent increase in stamp duty collection for the same period. Revenue receipts showed an increase of 23.3 per cent over 2009-10 and the government expects to collect Rs 1,21,503 crore in 2011-12. Mr. Pawar said revenue expenditure was expected to be around Rs. 1,21,445 crore and as a result a marginal revenue surplus of Rs. 58 crore is expected.
He also added that while the Central government fixed the ceiling on borrowing at 3 per cent of the GSDP, as part of fiscal discipline, he proposed to raise borrowings only to the extent of 1.93 per cent of the GSDP.
He reduced the tax on vada pav, a popular snack from 12.5 per cent to five per cent in the State. He continued the tax exemption on wheat, rice, pulses and their flours, turmeric, chillies, tamarind, gur, coconut, cumin seeds, fenugreek and parsely, papad, wet dates, Solapuri chaddars and towels, till March 31, 2012. Domestic LPG will continue to be tax-free this year. The empowered committee of State Finance Ministers recommended a 5 per cent tax on these items.
He exempted tax on transfer of copyright of films relating to their exhibition in theatres. However, he proposed to increase the VAT on liquor and soft drinks and sales tax of declared goods to generate revenue, apart from taxing transactions in stock and commodity exchanges, transfer of long held tenancy rights and these proposals are estimated to result in an additional revenue of Rs. 1,000 crore.
He said the turnover of sale of telecasting rights of various events was significant and was an important area from the revenue perspective. The telecasting rights were intangible goods and would now attract a tax rate of five per cent. He has also raised the tax on goggles to Rs. 12.5 per cent.
Mr. Pawar announced crop loans for farmers at reduced rates of interest and those who pay their loans within the stipulated period will get a loan of Rs 50,000 at a zero rate of interest. Loans between Rs. 50,000 and Rs.3 lakh will be given out at 2 per cent rate of interest. The government has set aside Rs. 84.28 crore for payment of interest subsidy. It has provided for a subsidy of Rs. 2,500 crore for electricity supplied to agricultural pumps. He also announced a waiver of interest and penalty for electricity dues from farmers who pay the principal of accumulated dues under the Krishi Sanjeevani Yojana.
He decided to levy additional duty and tax on electricity produced and sold in the State to create a fund for infrastructure for cities and villages having power plants. Mr. Pawar said places like Chandrapur, Parli, Paras, Bhusawal, Eklehere, Koradi and Khaparkheda, where thermal power plants were located would use this fund to better their areas. However, he did not specify the amount of tax.
Last year many States increased the standard rate of tax from 12.5 per cent to 13.5 per cent or even to 15 per cent, he said. Without raising the rate, Maharashtra's sales tax revenue collection has shown a record increase with estimates revised to Rs. 40,415 crore from the target of Rs. 35,986 crore.
Chief minister Prithviraj Chavan said the motto was fiscal discipline and an attempt was being made to streamline tax collection instead of imposing new taxes. The idea was to plug leakages and not put a burden on the poor. While there were many demands from various departments it was a tight rope walk to allocate funds and yet not create new tax burdens.
Speaking to the media Mr. Pawar said this was a budget with a human face. In response to a question he said there was no question of reducing subsidies and on the contrary the amount under various heads was hiked to Rs. 7,099 crore, a clear increase of over Rs. 1,000 crore over last year.