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Sops for government staff, farmers, weaker sections

Special Correspondent

Kerala Budget proposes additional resource mobilisation

THIRUVANANTHAPURAM: The final Budget of the United Democratic Front (UDF) Government in Kerala, presented in the State Assembly by Finance Minister Vakkom Purushothaman on Friday, proposes additional resource mobilisations of just Rs.17.34 crores while leaving an overall deficit of Rs.771.83 crores.

With the Assembly elections just three months away, the Budget, as expected, contains several proposals for Government employees, farmers and weaker sections.

The Budget provides for the long overdue pay revision for the Government employees with effect from March this year. All farm operations, except those of companies, have been exempted from agriculture income tax. The budget also proposes a slew of other initiatives to help farmers, the fishing community and the weaker sections.

Cut in stamp duty

The Minister proposed "a substantial relief to the people" by reducing the stamp duty on instruments of partition of property within the family to a flat rate of Rs.1,000 per document.

Mr. Purushothaman projected a revenue income of Rs.18,287.24 crores for the State in 2006-07, against a revenue expenditure of Rs.23,018.94 crores, leaving a revenue deficit of Rs.4731.70 crores. The fiscal deficit for the year is estimated to be Rs.6,834.55 crores. The capital expenditure will be of the order of Rs.1,412.24 crores, up from Rs.803.65 crores in 2005-06 (revised estimates). The additional expenditure announced under the Budget comes to Rs.195.89 crores.

He said the Value Added Tax (VAT) system, introduced in the State at the beginning of the current financial year, was yet to stabilise. In fact, there has been a fall in revenue from the goods covered by VAT this year, though the State has been compensated to the tune of Rs.450 crores so far by the Union Government. The Minister said that though he did not want to levy new taxes in 2006-07, it was necessary to "provide for certain changes arising out of the implementation of VAT for protecting revenue and to remove certain ambiguities."

He proposed advanced collection of tax on evasion-prone goods under the Kerala Value Added Tax Act of 2003, simplifying the process of VAT registration and removing the ambiguities relating to payment of presumptive tax, among measures intended to "stabilise the VAT system."

`Year of Medical Tourism'

He proposed declaring 2006-07 as the `Year of Medical Tourism,' considering the excellent potential for developing health tourism. The Budget earmarks Rs.21.71 crores for "monsoon tourism, pilgrim tourism, adventure tourism, farm tourism" and a new concept called `My Village, Tourism-Friendly Village,' to take the benefits of tourism to the rural areas.

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