NEW DELHI

Fresh taxes to net Rs. 65 crores in Budget

SHIMLA, MARCH 11. Fresh taxes amounting to Rs. 65 crores have been proposed in the Himachal Pradesh budget for 2005-06 presented by the Chief Minister, Veer Bhadra Singh, in the State Assembly here today.

The Rs 7462.30-crore budget, which leaves a marginal deficit of Rs 314.71 crores uncovered, focuses on economic reforms, expenditure compression and resource mobilisation to reduce the revenue deficit and limits borrowings.

The budget proposes professional tax ranging from Rs 50 to 200 per month on a large number of professionals including Ministers, MLAs, journalists, contractors, lawyers, insurance and estate agents, directors of companies, lesses and owners of petrol pumps and diesel filling stations, engineers, architects, banking companies and charted accountants.

Our Staff Correspondent adds

Deviating from his tax free budgets over the years the state Chief Minister Virbhadra Singh, who also holds the Finance portfolio, presented an annual budget of Rs. 7462 crores with a plan size of Rs. 1600 crores here today. The budget proposals indicate the increased pace of economic reforms as heavy taxation has been emphasised for the State's quick development.

In his speech the Chief Minister claimed a growth rate of 7.5 per cent with the Gross State Domestic Product at current prices expecting to grow from Rs 17,938 crores in 2003-04 to Rs 19,712 crores in 2004-05 as per advanced estimates.

In a major step towards financial improvement and stability, Mr. Singh outlined the government's `fiscal turn-around strategy' in the state. He indicated that this would include a total cut back on Non-SLR borrowings for the future, bringing a fiscal responsibility bill for ensuring revenue deficit reduction as prescribed by the Finance Commission and public governance and fiscal reforms, structural adjustments and protocols with World Bank to downsize the debt.

The Chief Minister also made his government's position clear on the fiscal reforms MoU he had signed with the Union government. He said more than 21 states including neighbouring Punjab have signed such understandings with the central government and it had led the state government to get Rs 157 crores as immediate assistance. He confessed that all central and externally aided assistance including that from the World Bank was linked to the signing of this MoU.

The state government, he said, has decided to implement Value Added Tax System and Rs 65 crores more would be generated towards financing the plan for the coming year. He announced rationalisation of stamp duty to reduce undervaluation, imposition of local area development tax on Haryana pattern, increase in electricity duty and special road tax and rationalisation of fees and charges for various public services especially water and sanitation.

A profession tax is proposed to be levied on the pattern of states like Maharashtra and Andhra Pradesh. But the daily wagers, contract employees, small shopkeepers, pensioners, artisans and farmers would be spared.

Regarding the revised budget estimates, he said, the year 2004-05 opened with a deficit of Rs 339.48 crores and expected to close with a cumulative deficit of Rs 291.64 crores. The total projected expenditure for 2005-06 is Rs 7462.30 crores as compared to the revised estimates of Rs. 7317.78 crores in 2004-05. Out of the total budget the estimated expenditure on salaries would be Rs 2184.35 crores, which is 29 per cent of the total budget, the interest payments would be Rs 1723 crores, loan repayments are expected to be Rs 928.70 crores and pension expenditure would be about Rs 703.54 crores.