Budget makes Delhi pay for Commonwealth Games

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.

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.

Leader of the opposition VK Malhotra later told reporters that the BJP is planning an agitation against the increase in VAT rates.

"The government has betrayed the trust of its residents," Malhotra said. "We are planning to launch an agitation as well as gherao the assembly."

Walia said 1,475 more low-floor buses will be purchased before August for which Rs675 crore have been allocated. Walia also announced the launch of a GPS-based vehicle-tracking system to make an online bus information system operational.

The state-run Delhi Transport Corporation will also introduce special non-stop services on 50 important routes.

Claiming that the retail prices of food items in the capital were the lowest as compared to other metros like Mumbai and Chennai, Walia said as against an increase of 12% in Mumbai and 15% in Chennai, the capital has registered an escalation in prices by 11.3% only.

He also noted that there was an increase of 6.85% on the tax collection front as compared to last fiscal. "The current year's revised target of tax revenue is Rs13,174 crore, which is 8% higher than the previous year. Next year's target tax revenue is Rs15,582.50 crore with a growth of about 18% over the current year," he said.

The government has also set aside Rs749 crore in the budget for development of basic services in the unauthorised colonies. It has already invested Rs2,851 crore in these colonies.

The old age pension scheme will be extended to 3.5 lakh people from the existing 2.5 lakh. Besides, the government has allocated Rs46 crore for giving pension to widows.

In the budget, Walia also proposed to set up three 200-bed hospitals at Vikaspuri, Burari, and Ambedkar Nagar and another 750-bed hospital at Dwarka.

Making an allocation of Rs1,112 crore for education, which is 10% of the total outlay, Walia said that construction of 17 school buildings will be started in the next fiscal.

He also announced an increase in the subsidy given to students for uniforms. "Now Rs500 per annum will be given to girl students of MCD primary schools at par with students of government schools," he said. "Similarly, Rs700 will be given to students of Class VI-XII of Delhi government and government-aided schools."

About 26 lakh students will benefit from this move, he said. Walia also proposed to enhance a scholarship by Rs50 to promote enrolment in schools.

On the industrial sector, he said, two special economic zones will be set up in the city — one in IT and IT-enabled services and the second in gems and jewellery — at a cost of Rs890 crore.

Walia also presented a rosy picture on the power front, saying the capital will be a power-surplus state in 2010-11. He allocated Rs110.80 crore for the sector.

In the housing sector, he said the government has already constructed 8,000 flats and they will be alloted to the residents of slum clusters soon.

"In addition, 7,000 flats are under construction at Baprola, Bawana, and Ghogha," he said.

The government has also allocated Rs476 crore for the social welfare sector. Walia said construction of a special ward in Ambedkar Hospital would begin soon.

The registration fee charged on various documents under the Indian Registration Act has also been increased to Rs500 from the existing Rs100 and the government expects an additional revenue of Rs6 crore from it.