Jayalalithaa puts TN on progress path

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The Jayalalithaa government unveiled Monday a progressive and growth-oriented budget for 2012-13 focusing on infrastructure, agriculture and youth skill building. The Rs 1.20-lakh-crore budget is well backed by fiscal consolidation and promises care for the common man.

In his first full-fledged budget since AIADMK came to power last May, finance minister O. Panneerselvam accorded top priority to infrastructure development.

He also made an initial allocation of Rs 1,000 crore for the proposed Tamil Nadu Infrastructure Development Board to be headed by the chief minister.

The pro-poor side of the government was well reflected in the robust allocation of Rs 30,330 crore for social welfare schemes —as much as Rs 4,900 crore going towards food subsidy alone.

Amid frequent thumping of desks by party colleagues, Mr Panneerselvam said the budget had been drafted with policy goals envisaged in CM’s Vision-2023 document that promised six-fold growth in per-capita income over the next 10 years while aiming at inclusive growth to eradicate poverty.

The budget prescribed revised guideline values (`600 crore) and introduced fresh taxation measures to mop up additional Rs 1,500 crore, but balanced it by a slew of concessions and tax cuts to benefit people.

For instance, tipplers have been taxed more to yield an additional Rs150 crore whereas VAT on wheat, oats and insulin has been cut to benefit diabetics.

In continuation of the many initiatives to improve health of women and children, the government has withdrawn the 5% VAT on feeding bottles and nipples and reduced VAT on sanitary napkins and diapers from 14.5% to 5%. The 5% VAT on helmets was also removed to promote traffic and industrial safety.

Housing and urban development got a fillip as the budget proposed an enhanced interest waiver scheme to the tune of `390 crore while waiving penal interest amounting to Rs 545 crore and providing relief to 1.14 lakh borrowers from cooperative housing societies.

The Tamil Nadu government hopes to mop up an additional Rs 1,500 crore through a slew of taxes during the coming financial year. Of this, about Rs 150 crore is expected to come from liquor while Rs 600 crore will be earned through property tax rate revisions.

Spelling out the strategy of government to manage the state’s finances for the year 2012-13, principal finance secretary K. Shanmugam said the Rs 1.20 lakh crore budget presented by finance minister O. Paneerselvam hopes for a revenue surplus of Rs 2,376.07 crore.

The main focus is to control net borrowings and achieve fiscal consolidation, he told reporters after the budget presentation Monday.

Elaborating on the additional tax measures, he said liquor purchased, procured and brought from outside the state, other than foreign liquor, will be taxed at 14.5 per cent at the second point of sale. “In effect, this means the liquor sold at hotels, restaurants and bars will become a bit costlier,” he explained.

Also, withdrawing VAT exemption on vegetable oil, the state has decided to levy 5 per cent tax on it.
While doubling the charges on advanced blocking of fancy numbers, there will be rationalisation of tax rates on tourist cabs, private vehicles and state contract carriers.

Apart from a hike in levy of infrastructure and amenities charges collected through local planning authorities by 50 per cent, the revised guideline value for property sale will come into force from April 1, 2012. Stamp duty goes down from 6 to 5 per cent.

VAT exemption has been announced for wheat and oats and a duty cut on e-bikes, sanitary napkins and diapers, CFL bulbs, insulin, hand-made locks and helmets.

According to the budget estimates for 2012-13, revenue receipts are projected at Rs 1,00,589.92 crore and expenditure, at Rs 98,213.85 crore. The total allocation for capital expenditure will be Rs 20,856.08 crore and the provision for loans and advances, Rs 1,352.12 crore.

The government proposes to borrow “only Rs 18,387.47 crore” though the total borrowing entitlement given by the Centre is Rs 20,716 crore. The fiscal deficit will be Rs 19,832.13 crore, 2.87 per cent of the gross state domestic product.