No new taxes in Punjab budget

Punjab Finance Minister Surender Singla presented a budget with no new taxes in the assembly in Chandigarh today.

The budget allocation of Rs 207 crore for the recruitment of teachers, doctors and veterinary doctors caught everybody's attention as it had been banned for the past eight years. The finance minister proposed to recruit 12,000 teachers, 1,318 doctors and 600 veterinary doctors in the current year.

Presenting the last budget of the Amarinder Singh-led Congress government, Singla said mega projects with an investment above Rs 1,000 crore would be offered special incentives, the specifications of which would be decided by the cabinet. He said such projects would create large-scale employment in the state.

He announced the state had decided to raise bonds through the Punjab State Industrial Development Corporation for paying Rs 480 crore industrial subsidy in three to four years, which has been long due.

He did not propose the removal of octroi but later during the press conference informed that the government would roll out an alternative of octroi by the end of May 2006 as it was not consistent with VAT (value added tax).

A lump sum value-added tax for the brick kilns would be introduced. A separate audit required under VAT will be abolished where a dealer is already subject to income tax audit and his turnover certified by the qualified auditors.

The pre-owned cars will be taxed at 4 per cent without the entitlement of input tax credit.

The exporter got a relief as duty entitlement pass book (DEPB) and Duty Free Replenishment Certificate (DFRC) will be placed in schedule 'A', the items attracting 'zero' rate of VAT.

The Finance Minster said that the state expected an investment of Rs 2,500 crore through Public-Private-Partnership in the next two years.

For the development of rural infrastructure Rs 400 crore would be spent in the annual plan, he added.

The size of annual plan has been fixed at Rs 4,000 crore against the revised outlay of Rs 3557.87 crore for the year 2005-06 that indicated an increase of 12.42%.

The Finance Minister proposed to raise the allocation for the diversification of agriculture from Rs 33.68 crore in 2005-06 to Rs 35.56 in the financial year 2006-07.

A provision of Rs 24 crore has been made 'Agriculture production Pattern Adjustment Programme'.

The Finance Minister also proposed to earmark Rs 25 lac per MLA per annum for the local area development of the constituencies. Addressing the media after the budget presentation, the Chief Secretary, Punjab, K R Lakhanpal said that there had been a healthy improvement in the fiscal parameters in the last years.

The revenue receipts of the state increased mainly due to VAT, stamp duty, debt swap of about Rs 500 crore and write offs by the central government.

The deficit on the revenue account was estimated at Rs 1390 crore for the year 2006-07 as against Rs 1710 crore (revised estimates) and Rs 3391 in 2004-05. Industry in Punjab is disappointed because it expected a rollback of the additional 5 per cent duty on electricity, but it did not happen.

The comments of Finance Minister on the BJP Leader A B Vajpayee that he acted as an enemy to Punjab by granting sops to the hill state created a cacophony in the house. The house was adjourned though the Finance Minister was through his job.