Wednesday, March 24, 2010

LPG price hiked, VAT on many items raised in Delhi Budget 2010-11

New Delhi, Mar 22 (UNI) Life for ''aam aadmi'', already burdened by skyrocketing prices of essential commodities, is set to get tougher with the Delhi Budget for 2010 presented in the Delhi Legislative Assembly today increasing VAT on CNG, diesel, dried fruits, desi ghee, glucose and tea while also withdrawing the Rs 40
subsidy on LPG.

Addressing reporters after presenting the Budget in the State Assembly, State Finance Minister A K Walia said the enhancement in VAT rates and withdrawal of subsidy on LPG were necessiated by the increased expenditure on infrastructural projects related to Commonwealth Games 2010.

''In view of increased expenditure due to the Commonwealth Games related projects and schemes and inadequate collection of taxes due to down turn in economy, additional sources of revenue are required,'' Dr Walia said.

The Budget removes the current subsidy of Rs 40 on the LPG which will lead to increase in prices to Rs 322.80 per gas cylinder.

The withdrawal of subsidy will relieve the State Government of a burden of Rs 160 to Rs 170 crore per annum.

The VAT on CNG for use in transport sector has been hiked to five per cent which will translate into a hike of Rs 1.09 per litre while the VAT on diesel have been increased from 12.5 per cent to 20 per cent which amounts to a hike of Rs 2.37 per litre.

The VAT on kerosene stoves, embroidery and Zari items has been increased to five per cent while that on dry fruits, desi ghee, plastic containers, paint brushes, inverters, cocoa, coffee, glucose, fertilisers, locks, weights and measures and tea has been hiked to 12.5 per cent.

Further, the VAT on writing instruments, watches above Rs 5,000, mobile phones and accessories above Rs 10,000 and readymade garments has also been enhanced.

Dr Walia, however, assured that there would be no extra burden on the ''common man'' as the prices of essential commodities would not be increased.

''In any case with the implementation of GST next year, the subsidy on most items will have to be withdrawn,'' Dr Walia said.

The Budget also hikes the VAT on bio-inputs like fertilisers and micro nutrients and plant growth promoters to five per cent and on wood, timber, plywood and laminated boards, utensils and cutlery items, except those made of precious metals, fibre board and particle board to 12.5 per cent.

The VAT rate on aerated drinks has been hiked from 12.5 per cent to 20 per cent, a hike that is likely to generate an additional revenue of Rs 10 crore.

Maximum registration fee on stamp has been increased to Rs 500 and that on other slabs proportionately. The State Government is likely to generate an additional revenue of Rs 6 crore.

Justifying the hike in the VAT rates and withdrawal in LPG and other subsidies, Dr Walia said, ''It was necessary to manage the finances required for building infrastructure for the Commonwealth Games. In this regard, it may be noted that despite several states withdrawing subsidies on several items many years ago, the Delhi Government had retained the subsidy, but in the present situation it was necessary to get the money required for infrastructure development for the Games.''

At the same time he assured that as soon as the financial position eases out, the government could announce more subsidies and make some concessions in the VAT rates.

Dr Walia said the subsidy on the consumers using 200 KW of electricity as well as that on pulses would continue.

The Opposition BJP in the Assembly, however, protested the Budget proposal. The presentation of the Budget was followed by uproarious scenes from the Opposition benches culminating in the walkout by the BJP members.

Presenting the Budget in the Assembly, Dr Walia said the Revised Budget Estimate of 2009-10 was estimated at Rs 25,800 crore against the original Budget Estimate of Rs 23,043 crore.

Total Budget Estimate for the year 2010-11 is Rs 26,000 crore that includes Rs 11,200 crore for plan expenditure, Rs 140 crore for expenditure on Centrally Sponsored Schemes and Rs 14,660 crore for non-plan expenditure.

Maximum 38 per cent allocation in the Budget has been to the transport sector at Rs 4224 crore. Thirteen per cent allocation has gone to urban development and water supply and sanitation, and 11 per cent allocation has gone to health, ten per cent to education and seven per cent to social welfare.

Among the initiatives announced in the Budget in the transport sector is mordernisation of the DTC fleet with the addition of 3775 low floor buses costing Rs 2019 crore, setting up a SPV to develop and maintain ISBTs, bus depots, Bus-Q-shelters and introduction of special non-stop service on 50 important routes.

Work on the approach road, for the Signature Bridge costing Rs 1131 crore has been started while the construction of the main bridge will start shortly.

In the health sector, Dr Walia said construction of 500-ward block at GTB Hospital at Shahadra was nearing completion and would be fully functional during year 2010-11.

Construction of Phase II of ILBS has also started.

Further, the Government plans to set up three 200-bedded hospitals at Vikas Puri, Burari and Ambedkar Nagar, and a 750-bedded hospital at Dwarka under PPP mode.

In the education sector, the government has increased the rates of uniform subsidy to students of MCD primary schools from Rs 200 per annum to Rs 500 per annum bringing them at par with students of the Delhi Government and Government-aided schools.

Also students of class sixth to twelfth of the Delhi Government and Government-aided schools will get an increased subsidy of Rs 700 per annum from the academic session 2010-11.

Further, the government has decided to extend benefits of uniform subsidy and textbook subsidy to the boys students of Government-aided schools (at present it is available only to girls) from the 2010-11 session.

The amount of scholarship to educationally backward minority students has been hiked by Rs 50 from the next academic session.

The Budget has also proposed an additional amount of Rs 749 crore for provision of services in unauthorised colonies.

In the social sector, the Budget proposes an amount of Rs 420 crore to provide age-old pension to one lakh more senior citizens.

It also announces setting up of nine tribunals under the Senior Citizens Maintenance Act for timely disposal of grievances of senior citizens.

Dr Walia said the proposed expenditure of Government of Delhi will be funded from Own Revenue Receipts of Rs 19,631 crore, Small Saving Loan of Rs 1000 crore, Central Plan Assistance of Rs 1284 crore, share in Central Taxes of Rs 325 crore and Rs 3760 crore from other sources.

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