Monday, 22 March 2010

Commonwealth Games to hit Delhiites' pockets

Delhiites will have to shell out more from their pockets for virtually everything from cooking gas to diesel with the state government today withdrawing its subsidy on LPG and increasing VAT on many items to "generate" additional revenue.

(Interview with Delhi's finance minister on Commonwealth Games' impact on Delhi budget)

The minister proposed an increase in Value Added Tax (VAT) on diesel, CNG, mobile phones and accessories above Rs.10,000, watches and readymade garments above Rs.5,000, fertilizers, kerosene, coffee, tea, desi ghee, dry fruits, kesar (saffron), glucose-D, household plastic items, utensils and cutlery items and inverters.

'There has been a lot of developmental work in the city and more to happen. A lot more money is needed and the government has no option but to slightly burden the people to incur the losses,' she said.

'This is a growth-oriented budget keeping in mind the Commonwealth Games and 'aam aadmi'. We have exhausted all our resources as we have spent (so) much on Commonwealth Games project. We need more money,' he added.

Presenting the budget amid vociferous protests by the opposition BJP, finance minister AK Walia announced the withdrawal of the Rs40 subsidy on LPG cylinders for domestic consumers. He also announced an increase in the value-added tax (VAT) on diesel and CNG.

Walia also proposed an increase in VAT on various items like desi ghee, household plastic goods, kerosene stoves, wood, inverters, tea, coffee locks, lanterns, fertilisers, and all utensils and cutlery items, including pressure cookers and pans.

With an increase in the VAT to 20% from the existing 12.5%, diesel will now cost Rs35.29 per litre in the capital. At present, it costs Rs32.92 per litre.

With the withdrawal of subsidy on LPG, a cooking gas cylinder in the national capital region will now cost Rs322.80 from the earlier cost of Rs281.20.

A 5% tax has been imposed on compressed natural gas (CNG), the fuel used for public transport like buses and autorickshaws. At present, there is no VAT on CNG.

By doing this, the Delhi government plans to raise an amount of Rs1,100 crore for the Commonwealth Games to be held in the state later this year.

Noting that there has been an increase in expenditure in the last two years on projects and schemes related to the Commonwealth Games, Walia said, "Our revenue collection through taxes has not been adequate due to recession. Therefore, it has becomeessential to look for measures to generate additional revenue to sustain development."

Chief minister Sheila Dikshit, however, Indicated that in case the city government received additional funds from the Centre to meet the needs of the Games, "we would be happy to pass it on to the residents".

Presenting a Rs26,000 crore budget, Walia said the highest allocation went to the transport sector, which has been given Rs4,224 crore as against last budget's allocation of Rs3,069 crore.

Opposition BJP MLAs were on their feet as soon as Walia announced the increase in VAT rates. They staged a walkout when Walia announced the withdrawal of subsidy on LPG cylinders

'Delhiites are already suffering from inflation. This budget will further increase their woes. The government is out to kill the common man,' said BJP leader Harshvardhan.

Delhi's Congress unit is on the defensive. Its chief and MP from northeast Delhi J.P. Agarwal said: 'Delhi's budget was not discussed with me.'

The hike in diesel, CNG and LPG cylinder price came as a shocker for Delhiites.

'I am disappointed as rising food price are pinching the monthly budget and this will add salt to injury. I believe they could have withdrawn the subsidy from cooking fuel only after taming food prices,' said Sanjay Nanda, a young professional.

Delhi government has spent nearly Rs.15,000 crore on various Commonwealth Games related projects.

There has been widespread development - beautification, flyovers, street scaping, foot over bridges, roads, signages, public transport and health facilities - in the city for Commonwealth Games to be held from Oct 3-14.


Anonymous said...

wats the overall expense?

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