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Raise in value added tax (VAT) by one per cent on several durable items: Ghadai
February, 19th 2011

Refrigerators, washing machines, air conditioners and cars will cost more in the state. Finance minister Prafulla Chandra Ghadai announced raise in value added tax (VAT) by one per cent on several consumer durable items while presenting state budget for 2011-12 in the Assembly on Friday. The total expenditure proposed in the budget is Rs 44,878 crore.

Ghadai said from April one VAT on consumer durables will be 13.5 per cent, up from 12.5 percent now. He said the Empowered Committee of State Finance Ministers had recommended increase in tax rate on essential commodities from four to five percent and some states have implemented it. "We refrained from doing so in view of the abnormal rise in prices of essential commodities in recent months," he said, adding, "The only alternative for was to raise the rate of tax on consumer durable articles from 12.5 percent to 13.5 percent." The move will not affect the common man and help in revenue augmentation by Rs 150 crore per annum, he said.

The budget proposed to exempt the prevailing one per cent entry tax levied on food items like onion, garlic, ginger, potato, egg, fruits, fish, cattle feed, and some other essential items from April one. Ghadai hoped it would help to reduce price of certain food items, though it will cause revenue loss of about Rs 25 crore a year.

The FM, in his budget speech, said the government has to be careful about revenue expenditure and give special attention to revenue generation, in view of the 13th finance commission recommendations like elimination of revenue deficit by 2011-12 and reduction of fiscal deficit to three per cent of gross state domestic product by 2011-12. Ghadai said the state government would be eligible for funds worth Rs 1144 crore from the Centre if it fulfils the commissions conditionalities.

Based on anticipated receipts towards states share from the Centre, the revenue receipt was estimated at over Rs 36,383 crore in 2011-12. The government intends to take around Rs 4900 crore as loans to meet its requirements next fiscal, Ghadai said.

The minister said the 13th finance commission have recommended grants to the tune of over Rs 1823 crore under different schemes for 2011-12 and accordingly provisions have been made in the budget for different departments. The budget has given emphasis on agriculture, irrigation, provision of drinking water and improvement of sanitation, education, he said.

The minister added a provision of Rs 240 crore for farmers who have suffered loss due to untimely rain in December last has been made.

Meanwhile, the CPM described the state budget as anti-poor and anti-farmer. Despite price rise, the state government has chosen not to hike minimum wages under various government schemes, a party statement said. The budget provisions aimed at creating more revenue will further shrink jobs and add to educated unemployment, it said. The Left party said the government had no plan to solve agrarian crisis and extend irrigation facilities to more land. The Rs 240 crore allocated to compensate loss due to untimely rains is too little, it added.

Hostage crisis rocks House

The state Assembly witnessed uproarious scenes for the second consecutive day on Friday regarding abduction of Malkangiri collector R Vineel Krishna and junior engineer Pabitra Mohan Majhi, ensuring scanty business except presentation of annual budget during the day.

Hardly four minutes of business could be transacted during the pre-lunch session as Opposition and treasury bench member climbed the Speaker's podium and jostled against each other, triggering pandemonium. The MLAs sought action against the captors and early release of Krishna and Majhi.

Exhibiting posters which read "Collector abducted, who is protected", Congress legislators disrupted proceedings from the beginning of the Question Hour and surrounded Speaker Pradip Amat slamming the state government over the ongoing hostage crisis. "If the government cannot protect a district collector, how can the general people feel safe?" asked Leader of Opposition Bhupinder Singh.

Post-lunch things remained the same. But following an all-party meeting convened by the Speaker the Opposition members agreed to allow smooth presentation of the budget 2011-12. Finance minister Prafulla Ghadai presented the budget in the evening without any disruption.

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