PHDCCI picks holes in Delhi Budget

NEW DELHI, JULY 24. Expressing concern over the widening gap between the Delhi Government's expenditure and revenue generation, the PHD Chamber of Commerce and Industry (PHDCCI) has stated that the State Government's Budget for 2004-05 focused only on raising taxes on a number of products for revenue augmentation, and completely overlooked the demand for rationalisation of tax structure in important sectors.

According to the PHDCCI president, Ravi Wig, improved governance and measures for curtailing government expenditure had not been adequately addressed to. "The Delhi Government should immediately set up a committee to look into and suggest measures for reducing non-Plan government expenditure," he suggested.

Underlining that the loss-making public utilities were a large drain on the finances of the State Government resulting in lower funds for development, Mr. Wig said it was a matter of concern that a roadmap for restructuring the Delhi Jal Board (DJB) and the Delhi Transport Corporation (DTC) into commercially viable utilities had also not been announced in the Budget.

Mr. Wig further said the increase in tax on diesel should have been avoided since there was already a cess on diesel. The fuel was also used by households for captive power generation to cover-up the power supply deficiency in the city, he noted.

"It is disappointing that the demand for lowering luxury tax on hotels from the current high rate of 12.5 per cent, highest in the northern region, has not been addressed to. PHDCCI had suggested that this should not exceed 5 per cent. Delhi has been out priced in international tourist markets due to high tariff of Indian hotels and even higher taxes levied by the Government. With multiple taxes and continuing high luxury tax, tourism will be adversely affected."

The PHDCCI president said the Budget had also ignored host of issues relating to tourist transport industry including high taxation on tourist cars, high fee for inspection and re-inspection of CNG buses, high penalty on delay in payment of road tax and high inter-State permit fee.

However, Mr. Wig welcomed the decision to keep entertainment tax rate unchanged at 30 per cent and the announcement of a policy being formulated for the entertainment sector. "The new policy should provide for incentives for development of multiplexes," he added.

The Chamber also lauded the decision not to change the stamp duty rate of 5 per cent on registration of properties that would result in increased revenues in the future. "However, the procedures for registration need to be simplified particularly in view of the stamp duty scams detected across various States," he added.

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