Petrol will cost Rs. 1.26 less in the capital with Delhi government slashing 20 per cent VAT on the hiked component in its budget on Monday which also provided a huge push to social sector spending to apparently win over sections disgruntled with Congress as it prepares for next year’s Assembly polls.

However, the slash in petrol prices may not give the much needed relief to common man as Delhi government proposed a fresh five per cent VAT on CNG, which is used by a number of people in the city for running their vehicles.

Petrol will now cost Rs. 71.92 after the cut. After the increase last week, Delhiites used to pay Rs. 73.18.

The CNG price will see an increase from Rs. 35.45 per kg following the five per cent hike in VAT.

“The price of petrol in Delhi is the lowest among all the metro cities and lower compared to the price in neighbouring cities of Haryana, Uttar Pradesh also. I have deeply considered the matter and of the view that the citizens of Delhi need to be provided some relief.

“Honourable members will recall earlier too we have given relief to the people when there was an increase in the price of diesel by exempting vat on the increased component.

Similarly, I propose to exempt the recently announced increase in the price of petrol from the levy of 20 per cent of VAT,” Chief Minister Sheila Dikshit said presenting the budget for 2012—13.

Social sector has the highest allocation in the Rs. 33,436 crore budget, the second since Ms. Dikshit has been handling the finance portfolio. Tax collection pegged at Rs 26,150 crore.

The plan allocation plan allocation is Rs 15,000 crore and the non-plan allocation pegged at Rs 18,268 crore.

The budget has a heavy dose of populist measures and is seen as a bid to regain the Congress’ support base for the assembly elections in the wake of the party’s crushing defeat in the municipal polls.

The previous budget’s size was Rs. 27,067 crore with a plan outlay of Rs 13,600 crore and a non-plan expenditure of Rs. 13,307 crore.

This year’s budget presentation was delayed due to coming into force of election code of conduct for municipal polls.

The government had presented a vote-on-account for expenses for two months due to Model Code. In the vote-on-account, Ms. Dikshit had pegged the total budget at Rs 30,970 crore.

The education sector has been allocated Rs. 1,901 crore and water and sanitation sector Rs 1,800 crore.

Another Rs. 631 crore has been earmarked for development activities in unauthorised colonies.

“If required, the amount will be suitably enhanced for development work in unauthorised colonies. It will no suffer due to lack of funds or want of funds,” Ms. Dikshit said.

The Delhi government issued provisional regularisation certificates (PRCs) to over 1,200 unauthorised colonies ahead of assembly polls in 2008. The then Dikshit government, while distributing the certificates, had promised to regularise the colonies if Congress came to power for third term.

Ms. Dikshit said her government look forward to Delhi emerging as a caring city where citizens proudly aspire to and secure a future for themselves and their children.

“We will continue to look more intensely at the education, health and financial needs of the weaker sections.

We would like to see Delhi developing into a good city to live in and a city that caters to the needs of all sections of the society,” she said.

The chief minister said the government will pay special attention to qualitative improvements of the vastly upgraded physical infrastructure and expansions of the roads, power, metro and water networks.

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