CLICK HERE FOR VIDEOTalking of VAT, Finance Minister P Chidambaram, in his Budget 2007 speech on Wednesday said: "VAT has proved to be an unqualified success. VAT revenues of the implementing States increased by 13.8% in 2005-06 and by 24.3% in the first nine months of 2006-07. The next logical step is to phase out Central Sales Tax (CST). I am glad to report that the Central Government has reached an agreement with State Governments to phase out CST. Consequently, the CST rate will be reduced from 4% to 3% with effect from April 1, 2007. I have provided Rs.5,495 crore for compensation for losses, if any, on account of VAT and also on account of CST."So far as the Central Government is concerned, the fiscal consolidation is proceeding according to the FRBM Act. Based on Revised Estimates, I am happy to report that the revenue deficit for the current year will be 2% (against a BE of 2.1%) and the fiscal deficit will be 3.7% (against a BE of 3.8%)."Talking of Plan Expenditure as a part of the Budget Estimates for 2007-08, Chidambaram said: "I estimate Plan expenditure for 2007-08 at Rs.205,100 crore. As a proportion of total expenditure (net of the SBI share acquisition), Plan expenditure will be 32%. Non-Plan Expenditure in 2007-08 (net of the SBI share acquisition) is estimated at Rs.435,421. The increase over 2006-07 is only 6.5%."
