Sops worth Rs 410 crore in Gujarat Budget

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Gujarat government has proposed tax reduction and exemption on number of items including housing materials, battery-operated two-wheelers, medical implants, helmets, toys, incense sticks, pooja items. But what will bring maximum cheer to the urban and rural middle classes and weaker sections is the proposed reduction in electricity duty on residences and educational institutions. As a result, electricity used in individual households will go cheaper.

As per the government estimates, the tax sops offered are to the tune of Rs 410 crore, which includes Rs 200 crore each for slashing of electricity duty and value added tax (VAT) rates.

Declaring that the state government wants to “lessen tax burden of the state, including children, women, elderly people, self-employed artisans, each and every individual household, students”, state finance minister Vajubhai Vala proposed a 25% reduction in electricity duty for residential consumers, even as drastically bringing down or completely abolishing value added tax (VAT) on as many as two dozen commodities.

Vala also exempted from VAT items used for pooja, saying, the government believes that the “people of Gujarat are religious”. Prasad bhog, distributed at some religious places on token payment, currently construed as taxable, has also been exempted from any tax. At the same time, Vala announced an increase in the limit of stamp duty exemption on instruments executed by self-help groups and sakhi mandals for securing loans or borrowings up to Rs 2 lakh. This would mean a tax relief of Rs 10 crore.

Addressing the media after the presentation of the state budget, the Finance Minister said that it is a poor-oriented budget that takes everyone along “Saune saath, sauno vikaas” (development for all), a slogan popularised by Chief Minister Narendra Modi during his four-month-long “Sadbhavna Mission” undertaken through day-long fasts across the State.

Of the total annual development plan size of Rs 50,599 crore, the maximum allocation of Rs 20,307 crore has been earmarked for the social services sector. Irrigation and flood control programmes have been allocated Rs 11,700 crore, signifying the State Government’s priority for the sector.

While commenting on his state’s budget, Chief Minister Narendra Modi has said, “Gujarat’s Rs.50,599-crore budget for FY 2012-13 is ambitious and farsighted for balanced, ‘inclusive growth’ of the state.” He also said, “Rs.2.51-lakh-crore proposed to be spent during 12th Five Year Plan larger than previous eleven Five Year Plans’ Rs.2.30-lakh-crore put together.”

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