VAT on garments, sweets slashed: 11-point guide to Delhi’s budget

  • HT Correspondent, Hindustan Times, New Delhi
  • Updated: Mar 28, 2016 19:39 IST
Delhi chief minister Arvind Kejriwal with finance minister Manish Sisodia address a press conference in New Delhi on Monday. (PTI)

The Delhi government presented on Monday a “tax-free” budget and rationalised the VAT structure which may reduce the cost of products such as readymade garments, shoes, watches and electric and hybrid vehicles.

Manish Sisodia, deputy chief minister of the Aam Aadmi Party (AAP) government, presented a Rs 46,600-crore annual budget for 2016-17, pegging the plan outlay at Rs 20,600 crore.

“The government is committed to reducing tax arbitrage and will attempt to keep a uniform rate with neighbouring states. In several items such as sweets – namkeen, watches, readymade garments, lower tax rate in neighbouring states was causing erosion in the same,” he said.

Delhi has registered a growth of 17% in 2015-16, he said, stressing the government believed in the idea of ease of doing business.

Read: Delhi budget: CCTVs in every classroom as AAP govt focuses on education

Here are the highlights

1) The government proposed to reduce VAT on a slew of products including sweets, namkeens and readymade garments from 12.5 to 5%. The government proposed reducing that VAT on watches costing above Rs. 5,000 from 20% to 12.5%. Sisodia said that VAT on battery operated e-rickshaws, hybrid vehicles has been proposed to be reduced from 12.5% to%.

2) Education, health and transport sectors get the lion’s share of allocation.

3) Rs 10,690 crore was earmarked for education, a rise of 8.68% over last year. Of this, Rs 4,645 crore is for plan expenditure (23%), highest among all the heads. Sisodia said 21 school buildings “have been constructed while 8,000 new classrooms are being built. It equals to the infrastructure of 200 schools”. He said every classroom will have CCTV cameras installed.

4) The budget proposed to provide drinking water to all authorised and unauthorised colonies by December 2017 through pipelines. Sisodia set aside an amount of Rs 676 crore in this regard.

5) The government alloted Rs 5,250 crore which forms 16% of the total expenditure, against last year’s allocation of Rs 4787 crore.

6) The transport sector emerged as another priority area with around Rs 1,735 crore being allocated. An amount of Rs 10 crore has been alloted for the construction of Aam Aadmi Canteens.

7) Rs 6,919 crore have been provided to the three civic bodies in the budget. “We hope the amount will be spent wisely,” Sisodia said.

8) The Gross State Domestic Product of Delhi at current prices is likely to increase to Rs 5,58,745 crore in 2015-16 from Rs 4,94,460 crore in 2014-15, indicating a growth of 13%.

9) Rs 1,068 crore was alloted for women’s safety, security and empowerment, while Rs 1,381 crore was set aside for social security and welfare schemes.

10) Extending the Mohalla Sabha Scheme to all the Constituencies, Sisodia announced Rs 350 crore allocation in 2016-17 for the Citizen Local Area Development (CLAD) scheme.

11) Sisodia allocated Rs. 100 crore for delivering basic amenities to jhuggi bastis, while art, culture and language will get a boost by an expenditure of Rs 54 crore.

(With agency inputs)

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