Bicycles, kerosene stoves, lanterns and sanitary napkins will be cheaper for Delhiites who will have to pay more for diesel-run vehicles, tobacco products, furnishings, suitings and sweetmeats under the new proposals in Delhi government's budget presented on Tuesday.

Presenting the budget, Chief Minister Sheila Dikshit proposed levying an additional tax of 25 per cent of existing tax rates on diesel-propelled vehicles specified in the schedule-I of the Motor Vehicle Taxation Act 2004.

"...many studies have pointed out that inspite of the use of CNG in all public transport vehicles and also by many private vehicles in Delhi, the growing number of diesel vehicles is adding to air pollution," she said making the tax proposals.

Terming cycling to be a healthy and non-polluting mode of transportation which "needs encouragement and protection of the government", Dikshit proposed to give relief to the "aam-admmi's preferred mode of commutation" by removing VAT on bicycles having an MRP of upto Rs 3,500.

She also announced exempting kerosene stoves, lanterns and petromax lamps and their spares from VAT.

A VAT of 12.5 per cent would, however, be imposed on unmanufactured tobacco, making all tobacco products including bidis and hookah smoking more expensive.

'Khandsari' sugar and textiles have also been exempted from VAT. Sanitary napkins costing upto Rs 20 have also been exempted from VAT.

Cooked food commonly known as Jan Ahar costing Rs 15 per thali has also be exempted from VAT.

The VAT on sweetmeats and 'namkeen' has been increased to 12.5 per cent from existing five per cent.

"We are particularly concerned about the growing incidence of lifestyle diseases among Delhi's citizens. Diabetes and hypertension are some of the unfortunate byproducts of our city life and unhealthy eating habits, even among our children, need to be addressed," the Chief Minister said.

She also proposed to tax industrial textiles such as canvas belts, filter clothes and furnishing and suitings at five per cent.

Dikshit presented a budget of Rs 27,067 crore for this year with a plan outlay of Rs 13,600 crore and a non-plan expenditure of Rs 13,307.

Out of Rs 27,067 crore, she said, the government proposes to fund a massive Rs 20,246 crore from tax collections, out of which Rs 14,500 crore would be garnered through Value Added Tax.

Other sources of funding would include recovery of loans and advances Rs 339 crore, small saving loan Rs 1,500 crore.

The first Delhi CM to present the budget, Dikshit earmarked Rs 160 crore for centrally-sponsored projects.

The Chief Minister announced a total of 14,000 new staff in schools and enhanced scholarships for students.

A total of 27 lakh school-going children would be covered under 'Universal Free Health Scheme' for which a corpus of Rs 100 crore has been set up.

The MLA fund has been increased from Rs two crore to Rs 2.5 crore.

Aiming to expand educational infrastructure in the capital, the NCT government plans to take up construction of 30 new school buildings at an outlay of Rs 270 crore and has proposed to further expand its scholarships to economically and socially weaker sections of the society.

People belonging to economically backward sections got a major boost as Delhi Government raised the allocation for constructing flats for them by five times to Rs 405 crore while it earmarked Rs 180 crore for improving civic amenities in slum clusters, which is a ten time increase.

The government has decided to give a "major push" to the programme for construction of EWS houses, Dikshit said adding 13,800 EWS flats are ready for allotment while construction of 27,700 EWS houses will be started during 2011-12.

Noting that the process of regularisation of unauthorised colonies is in process, she said an amount of Rs 698 crore is proposed for development works to be implemented in these areas during the next fiscal.

The transport sector too got a lion's share in the with the government today allotting Rs 3,348 crore for various projects, including construction of 14 new Integrated Transport Corridors, and proposed developing new ISBTS and renovating existing ones.

The budget also announced that the construction of Delhi Metro's ambitious Phase-III, which envisages adding another 103 km to the network, will begin this fiscal and proposed an outlay of Rs 1071 crore.