Published On : Wed, Mar 18th, 2015

Maharashtra’s govt presents budget of Rs 13,883-cr revenue deficit

State finance minister Sudhir Mungatiwar proposes to mobilise Rs 643 cr through various tax proposals

Mungantiwar-300x212Mumbai/NAGPUR: The BJP-led gvernment in Maharashtra on Wednesday presented its maiden budget with a revenue deficit of Rs 13,883 crore against Rs 4,103 crore in 2014-15.

The state finance minister Sudhir Mungantiwar has proposed to mobilise Rs 643 crore through various tax proposals including enhanced premium on additional floor space index (FSI), entry tax on import of Long Steel in state, increase in tax rate to 12.5% from 5% on plain and pre-laminated particle board.

That apart, the minister has revised excise duty rate on country liquor at 200% of manufacturing cost or Rs 120 per proof litre, whichever is higher.

The minister, in a bid to please the women voters, announced that no professional tax will be applicable to those drawing salary upto Rs 10,000 per month from the present level of Rs 5,000. This will benefit nearly 1.50 lakh employed women in the state.

On the BJP’s poll promise to abolish the local body tax (LBT), Mungantiwar announced it will be made effective from August 1 this year instead of orginally proposed from April 1 this year.

This is necessitated as the scrapping of LBT in 25 municipal corporations excluding Brihan Mumbai Municipal Corporation, a compensation of Rs 6,875 crore was required. This loss, the government proposes to be compensated by enhancing rate of tax under VAT.

”The enhanced rate of tax will be applicable to the whole state. A revenue neutral rate has been recommended considering the share of increased tax collection to be given to the areas where LBT is not levied. A decision in this regard will be taken after due consultations and thereafter LBT will be abolished from August 1.”

As far as Mumbai is concerned, BMC gets substantial revenue by levying Octroi duty on crude oil. The amount collected by oil companies as part of state specific duty from all consumers in the state. This aspect will also be taken into account, the minister said.

The government has admitted that there were limited options to increase tax considering the present state of economy. This is when the state bears a debt of Rs 3 lakh crore and interest burden of Rs 24,000 crore annually.

Mungatiwar announced that the state’s annual plan sise has been increased to Rs 54,999 crore for 2015-16 from Rs 51,022.54 in 2014-15.

He proposed to put in place evidenced based photography to monitor the expenses incurred on various schemes and projects by the government. A separate control room will be established at Mantralaya level.

The minister said at present the government grants additional FSI for industrial and educational purposes based on road width by charging premium in agriculture or no development zones in the approval regional plans at the district collector level. This will be now applicable in municipal corporations and municipal councils too.

Further, the government has extended tax exemption given on various essential commodities upto March 31, 2016 from March 31, 2015. Besides, white and Desi butter will be now charged at 4%.