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Maharashtra: Rural infra push in debut budget of Fadnavis govt

Maharashtra finance minister Sudhir Mungantiwar on Wednesday presented the first budget of the Devendra Fadnavis-led BJP government in the state, with a thrust on rural infrastructure and a promise to complete all pending irrigation projects in the next five years.

mumbai Updated: Mar 19, 2015 18:28 IST
HT Correspondent
HT Correspondent
Hindustan Times
Maharashtra budget,Sudhir Mungantiwar,BJP

Maharashtra finance minister Sudhir Mungantiwar on Wednesday presented the first budget of the Devendra Fadnavis-led BJP government in the state, with a thrust on rural infrastructure and a promise to complete all pending irrigation projects in the next five years.

In his maiden budget of Rs 1,98,230 crore, Mungantiwar announced scrapping of the controversial Local Body Tax (LBT), fulfilling one of the BJP’s election promises. Citizens, however, may have to pay more for certain commodities as a surcharge would be imposed on the Value Added Tax (VAT) to compensate for the losses incurred from cancelling LBT.

In a decision that may further push up realty prices in Mumbai, the finance minister said a premium would be charged on additional floor space index (FSI) for building construction.

There were no big- ticket announcements for Mumbai. The only major provision was the allocation of Rs 109 crore for the Mumbai Metro-3 project, which will be built between Colaba and SEEPZ.

Staying away from any major tax hikes, the finance minister extended tax exemption on essential commodities such as rice and wheat. Certain medicines needed for the treatment of cancer will also be exempted from tax, and a list of such drugs would be notified separately. Mungantiwar also proposed to reduce tax on guide wire (required for medical treatment) and LED bulbs from 12.5% to 5%. Work books, graph books, drawing books and laboratory books used by students have been made tax-free.

In good news for women, the minister proposed to reduce sales tax on purses and handbags from 12.5% to 5%. Further, women earning salary of up to Rs 10,000 a month will not have to pay professional tax. The move will benefit nearly 1.5 lakh women in the state.

With an outlay of Rs 7,272 crore, the government has also decided to finish work on 38 irrigation projects, which are nearing completion, in 2015-16. The minister also announced a new scheme, Chief Minister Rural Roads Scheme, to build rural roads with an allocation of Rs 2413 crore. Besides, Rs 1,000 crore was allocated for a water conservation scheme – chief minister Devendra Fadnavis’ pet project.

However, with the debt burden expected to rise to Rs 3.33 lakh crore – around Rs 31,000 crore more than the previous year – the revenue deficit too is expected to rise to Rs 3,757 crore.

With very little options left for resource mobilisation, Mungantiwar is relying on central funding (state’s share in central taxes is being increased) and non-conventional sources such as premium on additional FSI and restructuring of duty slab on country liquor, which will be 200% of the manufacturing cost or Rs 120 a proof litre, whichever is higher. The minister has proposed a levy of 5% entry tax on long steel, 12.5% tax on all types of wood-free plain and pre-laminated particle boards.

The premium levied on the additional FSI is expected to bring in Rs 5,000 crore into the state coffers. While proposing rise in the FSI 0.33 to 0.60 in the suburbs, the premium rates were levied at the ready reckoner rate of 2008 by the previous government. Fadnavis government has decided to apply the existing rate and also recover the dues from builders, who have paid the old rates. Fadnavis said his government was determined to recover the difference between the rates paid for premium, as the builders have been passing the burden of the existing rates to the consumer by taking affidavits from them. “The difference of the premium rate has been always pocketed by the builders. There was no reason to freeze the rate at 2008 ready reckoner price by the previous government. We will now ensure that the price paid by the builders for the premium is not passed on to consumers, as difference between the amount paid to the government and recovered from the end user is too vast. The regulatory authority will ensure that the retail prices are not hiked,” said the chief minister.

The finance minister promised to work out a regime to ensure that there was no double taxation in Mumbai. He said the mechanism would be chalked out in such a way that even the rise in VAT would not put additional burden on Mumbaiites, and at the same time, rural population will not be made to pay taxes for the services limited to urban areas.

State government also tried to woo the minorities, which are upset over scraping of reservation and the ban on beef, by announcing special schemes for minority-dominated towns of Bhiwandi, Malegaon, Miraj. Mungantiwar announced development of Haji Ali Dargah in Mumbai and Tajuddin Baba Dargah in Nagpur and upped the allocation for the Maulana Azad Minority Development Board.

Terming it an “output-based budget” rather that expenditurebased, Mungantiwar announced to set up a monitoring mechanism to plug holes in the system while spending the allocation. The control room at Mantralaya will monitor all infrastructure and development projects by using evidence from real-time photographs. “This will help up in utilising the money for the purpose it is meant for,” he said.

The opposition, however, termed the budget disappointing from the farmers’ point of view. Radhakrishna Vikhe Patil, leader of opposition in the assembly, said the budget “rubbed salt on the wounds of the farmers instead of giving any relief ”. The BJP’s ally Shiv Sena, too, expressed disappointment over little allocation for the infrastructure of Mumbai.

Highlights of the budget:
* Maharashtra finance minister Sudhir Mungantiwar presents state budget in assembly

* Govt announces scrapping of Local body tax (LBT) from August 1, 2015

* Monitoring room in Mantralaya to keep check on expenditure of state departments announces finance minister Sudhir Mungantiwar

* 2.23 lakh farmers to be freed from debt taken from moneylenders says Mungantiwar

* 1000 crore allocation for water conservation project to tackle drought: Mungantiwar

* Heavy allocation for improving agriculture in state budget being presented by Finance minister Mungantiwar

* Seeds bank to be set up for preserving seeds being used by farmers traditionally: state budget

* State govt intends to complete 38 irrigation projects on priority:state budget

* Rs 7272 cr allocation for irrigation to complete 38 projects says Mungantiwar

* Rs 100 crore for Shivaji's memorial off the Mumbai coast and a memorial for Dr Babasaheb Ambedkar

* Mungantiwar announces Rs 2413 cr project to build rural roads

* FM Mungantiwar announces Aamdar Adarsh Gaon Yojna on the lines of PM Modi's scheme to ask MPs to adopt villages

* State to build 1 lakh houses at cost of Rs 884 cr for poor announces Mungantiwar

* Rs 109 cr allocation for Mumbai metro 3 announces Mungantiwar

* Rs 268 cr for smart cities project announces Mungantiwar

* FM announces plan to overhaul state transport service, MSRTC

* Free wifi at some places in Mumbai under tourism promotion announces FM

* Boost to forest and beach tourism

* Skilled maharashtra scheme on the lines of Center's skill development scheme. The scheme to be named after late Pramod Mahajan

* Bio metric attendance for students and teachers in govt aided schools

* School of planning and architecture to be set up at Aurangabad

* Super speciality hospital of 1000 beds to be built at JJ Hospital campus

* Special scheme for minority dominated Bhiwandi, Malegaon and Miraj towns in state budget

* State budget: Excise duty on liquor to be increased

* State budget: premium to be charged on additional FSI

* Women earning upto 10000 per month need not pay profession tax

* State budget: A memorial for soldiers awarded with Paramvir Chakra to be built in Mumbai

* Maharashtra govt announces reduction of Tax on LED bulbs from 12.5% to 5%

* State budget: 5% tax on mixed spices

* Tax on lab books, workbooks, graph books of students waived off

First Published: Mar 18, 2015 15:27 IST