Chief minister Tarun Gogoi on Monday presented the state budget for 2014-15 and expressed strong apprehension that overall growth prospects at the national level, primarily the upcoming Seventh Pay Commission payscale, might upset the state's 'stable finances for 10 years.'

Gogoi, who also holds the finance portfolio, is pinning his hopes on a bigger central plan award of an estimated Rs 21,811 crore as he treaded carefully with sops and taxes.

However, with the state election just two years away, Gogoi could not resist doling out tax relief proposals worth Rs 40 crore for the low income group, which he proposed to compensate by taxing the affluent and raising VAT on natural gas.

Gogoi said the Comptroller and Auditor General has remarked in his report that "the state witnessed a marked improvement in key fiscal indicators," but was clearly wary of the impending impact of the Seventh Pay Commission.

"We shall have to revise our pay structure in consonance with the central payscale in due course. As a result of these developments and other unavoidable circumstances, we will have to be extremely careful and maintain a healthy and stable financial regime," Gogoi said in his budget speech.

In his Rs 2,357.91-crore deficit budget, Gogoi's sops include VAT exemption on chimney parts, kerosene lamps, renewable energy devices, reduction of VAT on writing instruments and accessories of bicycles.

In order to give some relief to salaried people, Gogoi proposed to raise minimum exemption of profession tax from Rs 40,000 per annum to Rs 1,20,000. For professionals like medical practioners, technical and professional consultants, whose annual gross income is between Rs 1,20,000 and Rs 1,80,000, professional tax will be Rs 1,800 per annum, while for those whose gross income falls between Rs 1,80,000 and Rs 3,00,000, the professional tax amount is Rs 2,160 per annum. Those having gross income above Rs 3,00,000 will pay professional worth Rs 2,500 per annum.

To compensate these sops, Gogoi proposed higher rate of taxes on luxury vehicles and also increased VAT on motor parts and accessories from 5% to 14.5%. He also proposed an increase in VAT on tobacco from 25% to 30% to discourage smoking.

According to the CAG report, for the financial year 2012-13, the state's fiscal deficit was 1.06% of GSDP as against the fiscal responsibility and budget management target of 3%, he said.

"The budget is not just about surplus and deficit, but about what we want to do for the welfare of the people," Gogoi said outside the house after presenting the budget.