Raje presents Rs 180-cr surplus budget

Rajasthan Chief Minister Vasundhara Raje, who also holds the state's finance portfolio, presented a Rs 180.39-crore surplus budget in the Assembly today.

While presenting her fifth and last budget before the Assembly elections, Raje spoke for over two hours about various initiatives being taken for development of the state by the BJP government.

She said that the economic and fiscal policies being pursued by her government had helped the state to improve its financial health. Even the Comptroller & Auditor General of India (CAG) in the report for 2006-07 has acknowledged this, she added.

"However, I am still not satisfied. A lot of work has to be done for the betterment of the people in the state," she said.

She said that the next year's revenue surplus would be 3.59 per cent of the total revenue receipts, and the revenue deficit would be 3 per cent the gross state domestic product.

However, the budget depicts a different story. The interest payment liability is increasing on a yearly basis. There is growing danger of the state moving towards a financial stress.

The interest payment liability as a ratio of revenue receipts for 2006-07 stood high at 22.3 per cent as against the Reserve Bank of India (RBI) norms of 18 per cent and the 12th Finance Commission guidelines of 15 per cent by 2009-10.

Out of every rupee, 16 paise are currently going towards the payment of interests. Though a revenue surplus of Rs 1,183.14 crore has been shown in budget estimates of 2008-09, the gross fiscal deficit continues to be very high and, according to the budget estimate of 2008-09, is placed at Rs 5,266.90 crore.

While announcing the various schemes, the chief minister said that efforts had been made to solve the drinking water problem in the state.

"We plan to encourage use of recycled water by setting up projects on a build-operate-transfer (BOT) basis," Raje added. To give thrust to education in the state, the chief minister proposed to launch "Veena-Pani Yojna" in the next fiscal. Under this project, students from the first to eighth standard would be provided free text books along with a school bag.

Raje also announced "Gyanodya Yojna" where charitable organisations and private parties would be encouraged to set up secondary and senior secondary schools in a public-private partnership (PPP).

Raje also announced an increase in the daily minimum wages and said that the government would come out with a sandstone policy soon. Thirty per cent posts in police jobs would be reserved for women, she added.

Coming as a shock to big retailers, Raje imposed 4 per cent tax on vegetables and fruits. "This move I feel would bring a relief to the small vendors," Raje added.

She lowered valued added tax (VAT) on marble and finished kota stone from the existing 12.5 per cent to 4 per cent. Raje however proposes to impose imposition of cess on mining industry which would be used for development of the affected ecological areas.

To give a boost to cinema in small towns, Raje proposed to exempt theaters from entertainment tax running in towns having a population of less than 100,000.

Besides this, she also announced lowering of entertainment tax from the existing 35 per cent to 30 per cent. She however proposed to levy a 10 per cent tax on direct to home broadcasting service.

She said that a customised incentive package would be provided to entrepreneurs proposing to set up industrial units of value exceeding Rs 500 crore in districts where no big industries have been set up so far.

She also announced lowering of tax on aviation turbine fuel (ATF) from 28 to 4 per cent in the areas where there is no air connectivity as of now. This move would help in boosting tourism, she said.

While increasing green tax on old vehicles from Rs 200 to Rs 500 per year, Raje announced that this tax would now be levied on 5-year-old or older vehicles.