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Kerala budget proposes increase in welfare pensions

THIRUVANANTHAPURAM: KeralaFinance Minister T.M. Thomas Isaac on Thursday presented the State budget for 2008-09, proposing an increase in all welfare pensions to Rs.200 a month and suggesting a one per cent cess on sales tax and value added tax to raise Rs.100 crore.

The budget sought to mobilise Rs.188 crore from the people, while setting apart Rs.305.78 crore for new programmes meant mainly for the welfare of the poor.

Dr. Isaac expected the revenue to reach Rs.24,935.72 crore during the year, against a revenue expenditure of Rs.28,302.77 crore, leaving a revenue deficit of Rs.3,367.05 crore. He provided Rs.1,561.93 crore for capital expenditure. The cumulative deficit, after considering the estimates under various other heads, would come to Rs.627.4 crore.

An increase in the tax on paper lotteries to Rs.7 lakh for each ordinary draw and Rs.17 lakh for each bumper draw to mobilise Rs.25 crore, a surcharge of 10 per cent on taxes for big retail chains to raise Rs. 2 crore and a 10 per cent luxury tax on hospital rooms carrying a daily rent of Rs.1,000 or more to raise Rs.1 crore are some of the other tax proposals.

Dr. Isaac proposed amending the Kerala Value Added Tax Act to limit the setoff of input tax and refund given on inter-State stock transfers to the amount in excess of four per cent.

He expected this to bring in Rs.50 crore. He proposed a plan for simplifying the tax compounding system for jewellers to attract more of them to the system.

The Minister proposed to reduce to four per cent the tax on aviation turbine fuel, all hospital equipment, materials (other than petroleum products) supplied to public sector institutions such as the Kerala State Electricity Board, the Kerala Water Authority and the Kerala State Road Transport Corporation by manufacturing units within the State and several other goods such as cooked food (in the case of dealers eligible for tax compounding facility), processed cashew, pulleys, clamps, rain-guarding compounds, flavours, tarpaulin, machine tools, printing machinery, waste management equipment, cycle parts and rugs/carpets/mats made of handloom and cotton.

Dr. Isaac further proposed exempting from tax temple ‘prasadams’ and paper bags (while increasing the tax on plastic carry bags to 12.5 per cent to discourage their use for environmental reasons).

Another proposal is to exempt the film industry from value added tax on right to use and on copyrights with retrospective effect from April 2005.

Tax on used cars is proposed to be brought down from four to 0.5 per cent. These concessions altogether are expected to lead to a revenue loss of Rs.25 crore.

In his speech, Dr. Isaac sought to present a Leftist perspective of ‘equitable development’ and proposed a slew of measures for helping those who found themselves outside the dynamics of the overall growth process.

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