A surplus of Rs.99 crore; tobacco products, paan masala heavily taxed
Chief Minister Ashok Gehlot presented a socially-oriented Budget for Rajasthan for the year 2011-12 on Wednesday, providing wide-ranging allocations and concessions to benefit the farmers, artisans, women, minorities, tribals and the newly-formed category of Special Backward Classes, besides trade and industry.
Mr. Gehlot's 165-minute Budget speech, among the longest in the Rajasthan Assembly history, was repeatedly thumped by the Treasury benches while the Opposition mildly interrupted it on occasions.
It was the first day for the former Chief Minister Vasundhara Raje in the Assembly after her re-election as Leader of Opposition. Ms. Raje sat quietly throughout the Budget speech, though Mr. Gehlot at times tried to provoke the Opposition with subtle comments. Once it got over, speaking to media outside the House she termed the Budget a “misleading treatise”.
“The Budget lacks vision. It does not have perspective for the development of Rajasthan,” she asserted.
The Budget, described by Mr. Gehlot at the outset as the country's first to be prepared through the Integrated Financial Management System (IMFS), maintains an estimated Rs.99 crore surplus while the revenue surplus and fiscal deficit are Rs. 353 crore and Rs.8,063 crore respectively. The total size of the Budget is Rs.63, 999 crore, which is 12 per cent higher than the revised estimates for the year 2010-11.
Mr. Gehlot said his government this time settled complex social issues — like the Gujjar agitation — averting bloodshed and ill-will among communities. Another achievement he mentioned was that of transferring funds, functions and functionaries of five departments to the Panchayati Raj Institutions (PRIs). A sum of Rs.195 crore, to accrue from new tax proposals, would be transferred to the PRIs and urban bodies, he stated. This includes funds raised through a surcharge of 10 per cent on stamp duty payable on documents related to immovable property and an urban cess of five paise on consumers who use more than 100 units of electricity a month.
The Budget offers Rs.255 crore by way of concessions, including total exemption of Value Added Tax (VAT) on wheat, pulses and rice, and on kerosene sold through Public Distribution System and imposes taxes worth Rs.500 crore.
“ Daal-roti khao aur Prabhu ki gun khao [Praise the almighty for your daily food],” Mr. Gehlot said in his otherwise businesslike speech, turning to the Opposition. He said he was exempting “ daal-roti” and “ daal-chawal” from VAT as they were the basic food of the common man.
Thanking the taxpayers for their cooperation, Mr. Gehlot said the revised tax revenue receipt for 2010-11 at Rs.19, 416 crore this was an increase of 18 per cent from that of 2009-10. He attributed the good revenue collection to efficient financial management of the United Progressive Alliance Government led by Manmohan Singh, a good monsoon in the State, better tax administration by his government, efforts of the officers and also to the simplification of the tax system.
There is a hefty hike of 50 per cent on tax on tobacco products and paan masala, while tax on aviation fuel has been raised from 14 per cent to 20 per cent. The district level committee rates of all types of lands have been raised by 15 per cent.
The items on which tax exemption has been provided include fresh vegetables and fruits, school bags costing up to Rs.500, things of daily use in the kitchen such as gas lighter, chakla, belan, chimta, iman dasta, musli, jhar, sieve and multani mitti. Hand-made woollen carpets, hand-spun woollen yarn and all types of razais (quilts) have been exempted from tax. There is full exemption to entertainment tax in cinema industry and to DTH and cable TV. The urban development tax, levied on cinema halls in towns with a population of less than one lakh, has been reduced by 50 per cent.
Taxes have been reduced on iron body desert coolers, LED lamps, plastic water storage tanks welding holder, welding machines, synthetic industrial diamond powder, and gem stone-cutting and polishing tools, while agriculture tractor and combine harvester have been exempted from Motor Vehicle Tax. The tax rates on electronic milk tester and molasses for making cattle feed have been reduced. To promote buses on rural routes a 100 per cent exemption has been announced in Special Road Tax to new stage carriage buses for two years from date of registration.