The Hindu : Front Page : Incentives for Government staff, farmers and weaker sections

Online edition of India's National Newspaper
Saturday, Feb 11, 2006

Front Page

Front Page

Incentives for Government staff, farmers and weaker sections

Special Correspondent

Kerala Budget proposes additional resource mobilisation of just Rs.17.34 crores

SETTING AGENDA: Finance Minister Vakkom Purushothaman presenting the Budget in the Assembly on Friday. — Photo: C. Ratheesh Kumar

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 an additional resource mobilisation of just Rs.17.34 crores while leaving an overall deficit of Rs.771.83 crores.

With the Assembly elections due three months hence, 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. Another notable proposal is to reduce 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 there had been a fall in revenue following the introduction of the Value Added Tax (VAT) system at the beginning of the current financial year. He recommended certain corrective measures to prevent revenue loss. These include advance collection of tax on "evasion-prone goods" and removing the ambiguities relating to payment of presumptive tax.

Input tax credit to gold dealers on bullion and old jewellery purchased by them is being withdrawn, while this concession is to be extended newly to pharmaceutical companies for the purchases made by them.

An entry tax of 4 per cent for coconut and copra and also plastic and PVC pipes and fittings is another proposal.

The tourism industry gets several sops under the Budget. Hotels (other than bar-attached ones) are to be exempted from tax on cooked food up to a sales turnover of Rs.5 lakhs. Hotels below the three-star category, clubs and heritage homes are to be allowed the freedom to compound their tax liability on cooked food at 115 per cent of the highest turnover assessed for them in the preceding three years.

He proposed declaring 2006-07 as `Year of Medical Tourism.' The Budget earmarks Rs.21.71 crores for promoting "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.

Houseboat operators will be allowed to compound their liabilities under the luxury tax. Incentives are also proposed to encourage private investments in the sector.

An Agriculture Resurgence Fund with an initial budget input of Rs.50 crores, a Rs.10-crore provision for the initial works on the proposed Vizhinjam deepwater container transhipment project and education assistance to students from the fishing community are some of the other proposals.

Printer friendly page
Send this article to Friends by E-Mail