Finance Minister K.M. Mani on Monday justified his budget proposals to hike VAT rates and the upward revision of pension age.
Addressing a press conference soon after presenting the Budget in the Assembly, Mr. Mani said the former Finance Minister Thomas Isaac had announced a de facto revision of pension age by announcing a uniform date for retirement.
The UDF government had merely made it a de jure decision. He said his budget speech also contained measures to protect the interests of youths, including creation of supernumerary posts, which would be reported to the Public Service Commission. He said there would be more clarity in the pension age revision once the government issued a detailed order. However, the government would go to any extent to ensure that the eligible benefits of government employees would be protected.
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He said the VAT rates had been increased from 4 per cent to 5 and 12.5 per cent to 13.5 in tune with proposals of the Empowered Committee on VAT, under the Union Finance Ministry.
He said the Central government had already revised upwards VAT on declared goods. Meanwhile, all States had gone in for upward revision of VAT rates. Once the country moved towards the Goods and Service Tax regime, the State would stand to lose Rs.1,000 crore on account of lower rates.
He said the emphasis on high-tech agriculture and promotion of bio-parks for rice and coconut and greenhouse agriculture units at panchayats would help bring qualitative changes in the farm sector.
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He said the State would be able to achieve 100 per cent Plan expenditure at the end of the financial year.