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THIRUVANANTHAPURAM: The first Budget of the Left Democratic Front (LDF) Government in Kerala, presented in the State Assembly by Finance Minister T. M. Thomas Isaac on Friday, lays special emphasis on addressing the problems of farmers, workers of the traditional industries, fisher folk and other weaker sections.

The Budget proposes new programmes and relief measures for these sections, with part of the additional resource for the new initiatives to come from higher levels of tax on gold and certain luxury items. Tax on gold ornaments will go up from one per cent to four per cent, while that on luxury items such as refrigerators, ovens, floor tiles, health drinks and soft drinks will go up from 12.5 per cent to 20 per cent. A luxury tax of 15 per cent is also proposed for hotels, wedding auditoriums, houseboats etc. The Budget, a revised one for the year (the previous UDF Government had presented its Budget in February before the Assembly elections), envisages additional resource mobilisation of Rs.105 crores and new expenditure of Rs.228.28 crores. It leaves an overall deficit of Rs.716.56 crores.

Dr. Isaac projected a revenue income of Rs.19,140.04 crores for the State in 2006-07 against a revenue expenditure of Rs.24,554.82 crores, pegging the revenue deficit at Rs.5,414.78 crores. The fiscal deficit for the year is estimated to reach Rs.7,534.54 crores. The capital expenditure will be of the order of Rs.2,213.25 crores, up from Rs.1,412.24 crores proposed in the Budget presented by the UDF Government in February.

To help farmers burdened with debts, the Budget proposes the setting up of a `debt relief commission' with quasi-judicial powers to arbitrate with private moneylenders on behalf of the farmers who had borrowed money from them at exorbitant interest rates. A separate mechanism called Agriculture Commission too is proposed to ensure price stability for farm producesand promote investment in the sector.

Higher allocations have been provided for procurement programmes and productivity improvement programmes.

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