Sisodia may avoid new taxes in budget

A pro-people tilt, no new tax and a record outlay of Rs 45,000 crore are expected to be the highlights of Arvind Kejriwal government’s second budget to be presented in the Assembly’s session starting on Tuesday.

Finance Minister Manish Sisodia, who last year presented a revolutionary “Swaraj Budget” – the first in the country – to promote participative governance, seems inclined to devote almost 75 per cent of Budget spending to health, education and transport in his proposals to be tabled on March 28.

The outlay for the 2015-16 budget was Rs 41,000 crore but in the next year’s proposal the outlay is likely to rise by Rs 4,000 crore, said sources.

A bulk of budgetary spending could be on creation of 3,000 mohalla clinics, nearly 1,000 new schools, drinking water pipeline network in unauthorised colonies, installation of CCTV camera,

The Delhi government’s coffers are in a healthy state due to a savings of about Rs 5,500 crore. Sisodia is likely to start implementing Kejriwal’s promised gradual cut in rates of VAT – the main source of revenue for the government – on certain items.

Since 2015-16 VAT collection target of Rs 24,000 crore may not be met due to a shortfall of around Rs 4,000 crore, sources in the VAT department said in budget 2016-17 tax on certain articles may like liquor may be increased from 20 per cent to 25 per cent.

The rate of VAT on UPS may go up from 5 to 12.5 per cent. A VAT of about 5 per cent on garments above Rs 2,000, and sale of plastic waste is also being considered, said an official.

In Budget 2015-16, Sisodia refrained from hiking the VAT rate and relied on increase in luxury and entertainment tax to generated additional revenue. The increase in entertainment tax hit clubs, spas and restaurant owners. Cable TV/DTH service users were also made to shell out an additional monthly entertainment tax of Rs 40.

The last year’s publicity budget of over Rs 500 crore is also likely to be pruned to almost half. The Opposition BJP has alleged that the AAP government has failed to use up to 30 per cent of last year’s budget. The party has also drawn up a strategy to highlight the issue during the session.

The Congress on the other hand is planning to stage a sit-in outside the Assembly to demand the removal of the “illegally” appointed 21 parliamentary secretaries.