Social sector gets lion's share in Delhi Budget for FY17

The Aam Aadmi Party (AAP) government in Delhi on Monday presented Budget 2016-17 with a rationalised value added tax (VAT) structure, reducing the prices of readymade garments, shoes, watches, sweets, snacks, and electric and hybrid vehicles.

The Arvind Kejriwal-led government said it has had a 17 per cent growth in tax revenue, 31 per cent in excise and 21 per cent in stamp duty in 2015-16. The Rs 46,600-crore Budget for FY17, presented by Deputy Chief Minister and Finance Minister Manish Sisodia, pegs the Plan outlay at Rs 20,600 crore. In keeping with the AAP manifesto, education, health and transport sectors got a lion's share of the total allocation. "The government is committed to reducing tax arbitrage and will attempt to keep a uniform rate with neighbouring states," said Sisodia. VAT has been rationalised on all tobacco products, including cigarettes, at a uniform rate of 20 per cent. VAT constitutes 65 per cent of the total tax revenue.

With social sector being a thrust area, education has been allocated Rs 4,645 crore (23 per cent of Plan outlay) which incidentally is the highest share among all expenditure heads. To boost higher education, new campuses of Ambedkar University of Delhi will be constructed at Rohini and Dheerpur.

Elaborating on its three-tier public health road map, the city government said it had allocated Rs 3,200 crore accounting for 16 per cent of the Plan outlay. The government stated it would lay emphasis on setting up 1,000 mohalla clinics by the end of the year.

The government's promise to provide basic facilities received a major thrust in the Budget, which has proposed that drinking water be provided to all authorised and unauthorised colonies by December 2017 through pipelines. For this, Rs 676 crore has been set aside. The government will continue with its scheme of providing 20,000 litres of water free of cost to each residential unit.

On the lines of the 'Amma canteens' set up by the Jayalalithaa government in Tamil Nadu, the Delhi government will introduce 'Aam Aadmi canteens' that would provide meals for Rs 5-10. A sum of Rs 10 crore has been allocated for the construction of these canteens. The transport sector emerged as another priority area, receiving the second highest allocation of 19 per cent of Plan outlay (Rs 3,943 crore). Sisodia also enhanced the one-time fixed subsidy for e-rickshaws from the existing Rs 15,000 to Rs 30,000.

The AAP government has decided to continue with its 50 per cent power subsidy for all consumers using up to 400 units, which covers around 90 per cent of total domestic consumers. A provision of Rs 1,600 crore has been set aside for this.

VAT’S ON THE CARDS?

• Value Added Tax (VAT) on sweets, footwear, satchels, marble, e-rickshaws and hybrid cars reduced from 12.5% to 5%
• VAT on readywear priced over Rs 5,000 reduced to 5%
• Plastic waste invites 5% tax
• VAT on watches priced over Rs 5,000 reduced to 12.5%. VAT constitutes 65% of total revenue
• Financial revenue for FY16 grew at 17%, compared to FY15
• Threshold limit of luxury tax  to be hiked from existing Rs 750 to Rs 1,500 per day per room
• Aam Aadmi canteens to be launched with Rs 10-crore budget
• Rs 100 crore earmarked for closed-circuit TVs (CCTVs) in classrooms
• Rs 114 crore for lighting 42,000 dark spots, Rs 200 crore for CCTVs in Capital
• 1,000 mohalla clinics, 130 polyclinics to be established
• E-ration card services to be rolled out. Point-of-sale devices at 2,400 shops
• Delhi to procure 1,000 non-AC buses, 1,000 premium buses and 248 minibuses

A sum of Rs 6,919 crore has been allocated to the three cash-strapped municipal corporations, which have had several run-ins with the city government for funds, in the Budget. "We hope the amount will be spent wisely," said Sisodia. The gross state domestic product of Delhi at current prices is likely to increase to Rs 5,58,745 crore in 2015-16 from Rs 4,94,460 crore in 2014-15, indicating a growth of 13 per cent, he added. The AAP government, which had come to power in the Capital championing the need for women's safety, announced Rs 1,068 crore for them.