Shimla, March 11
The people of the hill state will have to pay more for water, electricity, sewerage, irrigation and other basic services as Mr Virbhadra Singh, Chief Minister, made an effort to put the process of fiscal reforms on the fast track in the Budget for 2005-06 presented in the Vidhan Sabha today.
While increasing the minimum daily wage by Rs 5 and announcing the merger of 50 per cent of the dearness allowance in the basic salary, he also proposed a new wide ranging professional tax covering not only professionals but also the salaried class, including ministers and legislators. However, there was no mention of the 3 per cent dearness allowance, which became due from July 2004. The social security pension scheme will be extended to provide pensions to 10,000 old age persons and 5,000 widows.
Pharmaceutical products and packaged water will also become dearer with the imposition of tax on these two, while the economically well-off fruit growers will be denied the benefit of subsidy on cartons which will be available only to small and marginal farmers under the proposed rationalisation. Further, there will be no increase in the support price for various fruits procured under the market intervention scheme.
It was an altogether different Budget with the government, unlike the past, choosing not to specify the quantum of increase in taxes but broadly indicating the areas from where additional resources to the tune of Rs 65 crore were to be mobilised through direct and indirect taxation. Setting up of a public tariff
commission for services like transport, education, health, water and sanitation, increase of 7 per cent over the existing level for the special road tax, imposition of local area development tax in designated areas for integrated development and rationalisation of the stamp duty are the other measures proposed to raise resources.
The electricity duty is proposed to be increased for all categories of consumers and a special additional duty will be imposed on extremely power intensive industries like arc furnace-based units.
The professional tax will range between Rs 50 to Rs 200 per month and cover all salaried employees, including the members of the Council of Ministers and MLAs, petitioners, insurance agents, estate agents, brokers, contractors, directors of various companies, dealers registered under the state Sales Tax Act, employers of establishment, owners and lessees of petrol station and diesel filling stations, owners of hotels or guest houses, cable TV operators, holders of permit of transport vehicles, banking companies, charters accountants, medical practitioners of all kinds, engineers, architects, management consultants, travel agents, journalists, private educational and training institutions, property developers and forest contractors.
This tax will not be applicable to daily-wage earners, contractual employees hired by the state government, cooperative societies, small and petty shopkeepers, village artisans, farmers, including orchardists, support-service providers in villages like carpenters and blacksmiths, pensioners, and freedom fighters.
The rates of water supply in urban areas and private connections in rural areas will be rationalised.
The Chief Minister announced major initiatives to attract private sector investment to the tune of Rs 8,000 crore in infrastructure development, tourism, technical and professional education. He came out with a new concept of public-private partnership for executing mega projects, which included Rs 1,000 crore tunnel-cum-overbridge project to reduce the travel time between Shimla and Kalka to less than hour, Rs 750 crore express highways project to connect Una and Mandi, Dharmasala and Una , and a Rs 1,250 crore project to link Solan and Rohru via Jubbal-Kotkhai.
A corpus fund of Rs 300 crore will be set up for the proposed projects under the scheme, which include 15 nursing and five paramedical colleges, a major defence industry with foreign direct investment in Una district, ski village in the catchments of Allian and Duhangan at a cost of Rs 1200 crore, indoor ice-skating rink in Shimla, a biotechnology park and an IT park in Solan and parking lots in Shimla,
Dharamsala, Dalhousie, Manali and Mandi.
Presenting the Rs 7,462 crore budget, Mr Virbhadra Singh said to overcome the deterioration in state finances and to fulfil the conditions laid down in the report of the 12th Finance Commission it has been considered essential to put a cap on borrowings and set prudential limits of revenue deficits and fiscal deficits by enacting the Himachal Pradesh Fiscal Responsibility and Budget Management Bill.
