MP budget skips employment issue

Presenting his fourth deficit budget in a row, Madhya Pradesh Finance Minister Raghavji presented a Rs 236-crore deficit budget for 2007-08.

To earn more revenue through the limited options of value-added tax and entry tax, the minister raised entry tax on a number of household items that include utensils, detergents, soaps and groceries.

He also introduced "gender budget" for the first time by allotting funds to 13 departments dealing with the betterment of women.

There was no announcement on employment creation. "It is unlikely that the state government will come up with the policy during the session," an industry source told Business Standard.

The finance minister once again skipped the industrial sector and made no major announcements for the farm, road and power sectors. His budget speech spoke of the achievements of his governments, mainly proposals that the state government has received in the power and industrial sectors.

A provision of Rs 578.86 crore has been made in the budget separately for the ongoing power projects. The state government will rely on central sector grants, which include a provision of Rs 1,732 crore for roads. A minuscule amount of Rs 39.29 crore has been allotted for irrigation and nothing for tourism.

Succumbing to pressure from the farming community, the minister slashed entry tax on diesel from 28.75 per cent to 26 per cent. Further, steel and iron will now attract 2 per cent entry tax, Indian-made foreign liquor 2 per cent from the existing zero per cent, and coal, 2 per cent.

Mobile phones, furniture, tendu patta (leaves), lubricants, handbags, refrigerators and explosives will also get dearer since the finance minister raised entry tax on these items from existing 1 per cent to 2 per cent. "This will add Rs 54 crore to the state's kitty," said the finance minister.

Traditionally-made cold drinks (thandai) and sharbat (cold drink made of sugar syrup) will attract 4 per cent value-added tax instead of the existing 12.5 per cent. Shellac will fall in the zero per cent VAT slab instead of 4 per cent.

The plan expenditure of the state is Rs 11,552.21 crore, while non-plan expenditure stands at Rs 19,576.12 crore.