Maharashtra deficit up by 550 pc

The record deficit presented by Shivankar in the legislative assembly — who repeatedly refused to accept the charge that the once prosperous state is in a financial mess — has also not taken into account the borrowings of several thousand crores of rupees by several corporations floated by the State Government.

Shivankar also reeled out several proposals to cover the huge deficit. “Out of this deficit, I propose to make good Rs 720 crore by way of resource mobilisation proposals, which would result in the reduction of the deficit to Rs 375.31 crore. Gearing up of the tax collection machinery during the course of the year and tightening up economy measures, especially on the non-plan revenue account side, would result in further net addition of Rs 300 crore. This would result in the reduction of the deficit to Rs 75.31 crore,” the Finance Minister said.

Putting a severe burdenon the industry and common man, Shivankar increased the tax on petrol by 44 paise per litre and on diesel by 63 paise per litre with immediate effect. The alliance government has also abolished subsidy for its much-publicised Zhunka-Bhakar scheme following rampant corruption in it.

In a bid to woo the rural masses ahead of the elections, Shivankar declared four major welfare schemes — Punjabrao Deshmukh Interest Subsidy Scheme, Annapurna Scheme, Jeejamata Mahila Adhar Vima Scheme and Baliraja Suraksha Vima Scheme. Under the interest subsidy scheme, those farmers, who take short term loan up to Rs 25,000 and repay the same in a time bound period, will be given interest subsidy of four per cent by the government. The scheme envisages to cover an estimated 20 lakh farmers.

Under the Annapurna Scheme, the existing public distribution scheme will modified for the families below poverty line by providing them 10 kg wheat or rice at Rs two per kg from May 1, 1999, while under the insurance scheme for women, incase of accidental demise of the head of a family, his wife or son or daughter will be entitled to a lumpsum assistance of Rs 25,000 from the government. The scheme will come into force from May 1, the Maharashtra Day. Under the Baliraja Suraksha Vima Scheme, if any family of landless agricultural labourer, small and marginal farmers becomes homeless and due to natural calamity, it will get Rs 5,000 for partial damage and Rs 10,000 for major damage. This scheme will also be implemented from May 1.

Along with hike in tax on petrol and diesel, the alliance government has proposed to hike the duty on electricity by one per cent for commercial consumers and imposed sales tax for consumers purchasing above one million units of electricity.

Shivankar has also proposed levy of four per cent tax on woolen blankets, bedsheets and towels manufactured on powerloom, four per cent tax on imitation jewellery and reduced taxes on plastic jewellery from 13 per cent to four per cent, edible and hydrogenated vegetable oilfrom 1.5 to one per cent, gold and silver (battim) from two to 0.5 per cent and exempted tractor trolley, neera and spectacles up to Rs 100, from payment of sales tax. The alliance government has also proposed to exempt pens and ballpens costing upto Rs 50 from the payment of sales tax.

The Finance Minister brought on par the tax on loose and packed tea. At the moment, tax on loose tea is four per cent and eight per cent on packed tea. Now there will be uniform tax of eight per cent. On abolition of octroi, Shivankar said the decision was taken after taking into consideration the reports of committees and commissions set by the centre as well as state government.

“The loss of income during to abolition of octroi will be compensated by government. The receipts of octroi during the year 1997-98 will be the base for determining the compensation, which will be given from the next financial year. Thereafter, an increase of 10 per cent will be assured every year for the next four years,” the Finance Minsteradded.

In this connection, Shivankar hoped that municipal corporations will follow the successful experiment carried out by the Navi Mumbai Municipal Corporation. On the abolition of value added tax, Shivankar said his government has taken the decision since VAT had imposed an onerous burden on tax payers in terms of accounts keeping, which small dealers find difficult to comply with. Secondly, multiplicity of rates combined with VAT had complicated filing of returns for resellers and above all, there was harassment of tax payers after the introduction of VAT.

However, Shivankar has now proposed levying of one per cent turnover tax and surcharge at 10 percent on gross tax. The surcharge will be payable by only those tax payers whose gross tax liability is above Rs one lakh.On profession tax, Shivankar said, while there will be no change in the present structure, partnership firms and Hindu undivided families will not be taxed under the Profession Tax Act.

The Finance Minister also declared that thearrears of sugarcane purchase tax from closed units will be waived. For removal of regional imbalance, the alliance government has made a provision of Rs 455 crore for Vidarbha, Rs 292 crore for Marathwada and Rs 353 crore for rest of Maharashtra and provided Rs 489 crore for employment guarantee scheme.