Days ahead of the ruling alliance MLAs heading to Goa for their chintan shivir comes a bonanza for coconut-lovers in Punjab. The feisty arguments of former BJP minister Manoranjan Kalia that dry coconut also be treated as a fruit not dry fruit led to Punjab Finance Minister Parminder Singh Dhindsa abolishing the value added tax (VAT) levied on it. The fresh coconut falls under fruits category and attracts no VAT,while almost all the states levy tax on dry coconut as it is a dry fruit.
Dhindsa while concluding debate on Punjab budget 2013-14 Monday announced that 5.5 percent on branded shoes costing up to Rs 750 (from Rs 250 earlier) has been exempted - it would lead to revenue loss of Rs 30-40 crore to the state exchequer - and declared yet another bonanza for Deputy Chief Minister Sukhbir Badals sports department by granting Rs 10 crore for sports infrastructure. The latter came after a news report said sports infrastructure in Punjab was in a shambles as state had failed to provide its share for availing central grants.
However,Kalia insisted that the FM also announce to abolish VAT on dry coconut,saying it is used by people in their prayers. An unrelenting Kalia forced Chief Minister Parkash Singh Badal to send a note to Dhindsa on the same and he obliged. The cash-starved finance department is pegging the loss from VAT on dry coconut,also used in sweets,to anywhere between Rs 25 to Rs 30 crore,though the final estimates on loss due to the impromptu tax concession will be worked out Tuesday.
After facing salvoes of two former finance ministers - Congresss Lal Singh and Peoples Party of Punjab president Manpreet Badal - it was Dhindsas turn to hit back. And he did so by putting up a strong defense against assertions of the duo as mere political statements.
Reacting to Manpreets write-ups in newspapers on the budget in which the former finance minister had said the debt burden of militancy days was just an excuse for states unsustainable debts,Dhindsa said over Rs 15,000 crore was incurred during militancy days on security,of which just about Rs 5,000 crore was waived of by the Centre. The remaining Rs 10,000 crore along with interest would add up to a whopping Rs 54,000 crore,enough to push Punjab from revenue surplus to revenue deficit state, he said.
Notably,Chief Minister Badal on assuming power in 1997 had requested then Prime Minster,Inder Kumar Gujral,to waive of entire militancy-related expenditure. Gujral had then set up a committee. Punjab which was negotiating for more than Rs 15,000 crore waiver but in year 2005,the Centre wrote off nearly Rs 5,000 crore.
Reacting to former Lal Singhs assertions during the mock assembly that the government had not reflected the debt of state procurement agencies in the budget,he said these loans were procured against stocks every year for procurement operations. Like Lal Singh,he compared Punjabs finances with Haryana,saying its loans and revenue deficit were growing despite no legacy of militancy in the state. He also compared states fiscal parameters with the Governmnet of India to claim alls well in the state. Defending his projections on revenue receipts,he said states excise and VAT collections were robust since last few years and its estimates were based on present trends.
Dhindsa on debt burden on state
It is always the responsibility of the Centre to bear the expenses spent by state during exigencies as and when the state spends on maintaining the integrity. Centre has been spending money on Naxal affected areas and even in Jammu and Kashmir but why not in Punjab