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Budget highlights |
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To bring down sales tax on fertilisers from the present 4 per cent to 0 per cent; To reduce purchase tax on milk from 4 per cent to 2 per cent; To abolish octroi and replace it with local area development tax
(LADT) at the rate of 2 per cent on all goods imported into the state; To clear backlog of pending cases up to March 31, 2002, and give relief to dealers by disposing of the same through "self-assessment scheme" which will fetch Rs 10 crore; To give a similar concession to
"kutcha arhtias" under the summary assessment scheme without calling such dealers to the office of the assessing authority; Cinema owners to have option to deposit tax either lump sum or on actual basis. The rate of lump sum tax is proposed to be reduced by 33 per cent from the existing level and that of the entertainment duty from 125 per cent to 50 per cent; To encourage setting up of amusement parks by giving an option to entrepreneurs to pay tax in lump sum or entertainment duty on actual basis. The rate of entertainment tax is proposed to be reduced from 75 per cent to 50 per cent; To restore the "leave travel concession" facility to all government employees, effective April 1, 2003. To reduce by half per cent rate of interest on co-operative loans to bring it down to 13 per cent. The rate was reduced by 1 per cent during the current year as co-operatives provided vital credit and other inputs for agriculture; To dispense with the coercive process in section 67 (a) of the Punjab Land Revenue Act for recovery of co-operative loans and that no farmer will be arrested for the recovery of co-operative
loans.
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Chandigarh, March 24
Punjab Finance Minister Lal Singh today unwrapped his Budget basket and cleverly juggled and juxtaposed concessions, incentives and tax proposals while revealing a deficit of Rs 682.60 crore.
Acting as a Santa Claus, though he revealed what he had for everyone from farmers to traders/industrialists to employees, he kept quiet on the exact import of proposed user charges on social and economic services the government provided to the common man or expected revenue returns from tax buoyancy from enhanced stamp duty and registration fee and sales tax or by capping government expenditure.
Mr Lal Singh, however, emphasised that besides Rs 100 crore kept apart in the Annual Plan for new industrial incentives for revival of the small and medium sector, the other gifts would mean a revenue sacrifice of Rs 90 crore. Some key industrial incentives are:
Freight subsidy to the extent of 1 per cent of the export value of the goods with a cap of Rs 50 lakh per unit per year;
Capital subsidy to the extent of 25 per cent in fixed capital investment up to Rs 25 lakh per unit to the existing small-scale units for modernisation and technology upgradation; and
Capital subsidy at the rate of 30
per cent on fixed capital investment up to a maximum of Rs 30 lakh per unit to
industrial units in the border districts.
Mr Lal Singh announced a 12.5 per cent tax to be levied on telephone rentals which, he hopes, would fetch at least Rs 100 crore. If he expects a Rs 200 crore cut in government expenditure, Rs 250 crore from tax buoyancy in stamp duty and registration fee, he also counted the expected Rs 100 crore from enhanced user charges.
The Finance Minister dug into his Budget basket to reveal the special items for the next financial year: A package for sustainable and profitable agriculture and allied services, including animal husbandry and integrating it with rural development and more funds for panchayati raj institutions as well as urban local bodies; social sector with greater motherly care for Scheduled Castes children, particularly girls; education and medicare to the poorest of the poor; power sector reforms to unbundle the "monopolistic and monolithic" state electricity board and ensure "affordable and continuous" power to all consumers; infrastructure development, besides re-engineering and re-structuring of development priorities through the World Bank funding; reducing the burden of huge outstanding debt and disinvestment in public sector undertakings.
Punjab has submitted five proposals worth Rs 5,000 crore to the World Bank, which has opened a dialogue with the state after five years of boycott, all due to supply of "free" power and water to the agricultural sector. The areas identified for funding are rural drinking water supply, urban infrastructure, improvement of state highways and power sector reforms.
The size of the Annual Plan (2003-04) was fixed at Rs 2,793 crore. However, due to the financial constraints faced by the state, the actual expenditure is likely to be Rs 2,428.03 crore, which reflects a plan performance of 86.93 per cent. This is in contrast to the Plan performance of 59.51 per cent during 2001-02. It is now proposed to fix the size of the Plan (2003-04) at Rs 3,200 crore.
Mr Lal Singh kept the focus of his presentation on fiscal responsibility and budget management, corrective steps to restore financial health, improving quality of public expenditure, development of infrastructure, diversification in agriculture, power sector reforms, industrial revival, urban renewal and devolution of funds and functions to the urban local bodies and panchayati raj institutions, improvement in quality and delivery of education and health, welfare of the Scheduled Castes, backward classes and aggressive disinvestment in public sector undertakings.
Though the minister welcomed the Union Budget, he said the state would take up the case for increased share of Punjab in divisible central taxes, submit a memorandum to the 12th Finance Commission to seek debt relief, which had been denied to all states since the Ninth Finance Commission and protest against the levy of excise duty on hosiery at 10 per cent. He expressed grave concern the over Centre's intentions to dismantle the minimum support price structure now available to farm produce.
Mr Lal Singh stressed that "central excise waiver and tax holiday granted to the new industrial units in Himachal, Uttaranchal and Jammu and Kashmir will not only adversely affect new industrial investment in Punjab but also compel the existing units to shift to neighbouring states".
Punjab would also pursue the proposal on crop readjustment scheme of Dr S.S. Johl with the Centre. It has been pending with the Union Ministry of Home Affairs and seeks Rs 1,280 crore per year for encouraging crop diversification, which, in turn, will benefit the Centre as much as the farmers and improve the public distribution system and also clear the huge
foodstock.
