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Gujarat Budget has rural focus; high-end cars to cost more

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Press Trust of India Gandhinagar
Gujarat's Budget for 2016- 17, presented in the Assembly today, focuses on social sector and rural development, apparently factoring in the debacle suffered by ruling BJP in last year's Panchayat polls, while it proposes to hike tax on certain items like luxury cars.

Presenting the Budget, Finance Minister Saurabh Patel said the total outlay of Rs 1,51,852 crore for 2016-17 shows an increase of 13 per cent over the last fiscal, when the overall size of the Budget was Rs 1,39,139 crore.

This year, too, the Government presented a Budget with overall surplus of Rs 245 crore and revenue surplus of Rs 3,236 crore. The state has hiked tax on certain items, which is likely to net Rs 195 crore, and also provided tax relief to the tune of Rs 251 crore.
 

The planned expenditure proposed for 2016-17 stood at Rs 85,558 crore as against Rs 79,295 crore in last fiscal. Of this, a whopping 47.09 per cent would be utilised for social sector development and 6.94 per cent towards farm segment.

The Budget proposed to hike tax on luxury cars and expensive bikes from 15 per cent to 20 per cent. The new rate will be applicable on cars and SUVs having price tag of more than Rs 15 lakh and bikes costing over Rs 2.5 lakh.

To discourage people from consuming pan masala and related items, the state has proposed to hike tax on them to 25 per cent from 15 per cent now.

During his speech, Patel said the Budget focuses on the common man, especially those living in rural and tribal areas. Importance has been given to build rural infrastructure such as roads, schools, colleges and health services.

"This Budget aims at increasing income of people living in tribal and rural belt. We have also taken care of rural infrastructure and development of agriculture sector by introducing schemes for farmers and cattle rearers."

Social services have been accorded special priority, he said. "Allocation for social services is Rs 40,285 crore this year (FY17), which is Rs 1,801 crore more than last year. For agriculture, we have allotted Rs 5,940 crore while Rs 2,764 crore has been earmarked for rural development."

For boosting rural road infrastructure, Rs 2,500 crore has been allocated under 'Mukhya Mantri Gram Sadak Yojna. A provision of Rs 185 crore has been made in Annual Development Plan for developing 300 villages as 'Smart Villages'.

"The Government has made a provision of Rs 375 crore to provide interest relief to farmers under which interest on kharif crop loan up to Rs 3 lakh will be only 1 per cent. This will benefit 28 lakh farmers," said Patel.

The focus on rural areas comes in backdrop of BJP's heavy defeat in District and Taluka Panchayat polls late last year. Gujarat will face State polls in late-2017.
(Reopens BOM17)

The financial statement also sought to deal with goods coming to Gujarat through e-commerce transactions. As per the Government, Gujarat based dealers are adversely affected by goods coming here from other States. Dealers from outside Gujarat pay less tax, making their goods cheaper against those sold by local dealers.

To deal with this situation and provide a level playing field to local dealers, such transactions will be covered under the new Entry Tax provision, for which, a separate Bill will be brought in the session, said Patel.

Giving an example, Patel said if Maharashtra levies 5 per cent tax on goods and Gujarat takes 15 per cent, then the dealer sending goods here from the neighbouring State will have to pay additional 10 per cent Entry Tax to set off the difference.

The Government allocated Rs 1,000 crore for the "Mukhyamantri Yuva Swavalamban Yojna', a scheme to help students of Economically Backward Classes(EBCs), which was launched a few months ago in the wake of Patel quota stir.

The family income limit for beneficiaries of welfare schemes has been increased to Rs 6 lakh per annum from Rs 4.5 lakh now.

The Minister apprised the House about the introduction of 'Food for All' scheme, which will be launched from April 1. A provision of Rs 456 crore has been made in the Budget to provide foodgrains at affordable prices to around 3 crore eligible citizens.

Under the scheme, wheat will be sold at Rs 2 per kg and rice at Rs 3 per kg.

However, the Budget does not mention that the scheme is part of implementation of the Food Security Act, brought by previous UPA Government to give subsidised food to around 60 per cent households of the country.

The Gujarat Government had earlier announced it will implement the Act by April this year.

During his speech, the Finance Minister stated that the Government is determined to fill up around 66,000 jobs in one year.

Of these, 20,400 posts are in education sector, 17,200 in police force, 7,800 in health, 7,800 in revenue, 1,600 in Forest Department, 1,200 in engineering cadre, 1,100 posts in accounts and 3,000 posts of junior clerks.

In a significant decision related to health sector, Patel announced patients of diabetes and high blood pressure will get free medicines for life from Government hospitals, where they will have to register themselves.

To improve quality of education in schools, the State has proposed to recruit 4,230 retired teachers on honorary basis, for which a provision of Rs 38.43 crore has been made in the budget.
The government also promised to set up 'finishing schools' in educational institutions to improve the employability of graduating students.

Tax reliefs to the tune of Rs 251 crore have been proposed. Various items made from bamboo such as broom, bowl and hand-fan, among others, have been fully exempted from the current 5 per cent tax. The move is aimed at providing relief to people from weaker sections engaged in making such items.

In a relief to those who earn livelihood by ferrying goods on pedal-rickshaws, the government has proposed to fully exempt these vehicles from the existing 5 per cent tax.

To popularise the use of mosquito nets to control malaria and dengue, the government has exempted them from 5 per cent tax and the same relief has been provided to sanitary napkins and adult diapers also.

The Government proposed to reduce the tax on ceramic products from 15 per cent to 5 per cent to provide boost to the sector and create more jobs.

In a relief to hotels and restaurants, which pay electricity duty of 25 per cent, the Budget proposed they will have to pay only 15 per cent if they are using high voltage connection and 10 per cent for the rest.

Similarly, Patel proposed to reduce the rate of electricity duty from 25 per cent to 15 per cent for private hospitals with 10 or more beds.

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First Published: Feb 23 2016 | 9:28 PM IST

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