Budget Speech - 28th March 2002
Sectoral Details and Tax Proposals for 2002-03
Highlights of Budget 2004-05
Budget at a Glance
Sectoral Details and Tax Proposals for 2002-03

1. I had placed the Budget for the year 2002-03 before this august House on 28th March, 2002. Today I propose to discuss the sectoral programmes and tax proposals of my Government for the year 2002-03.

TENTH FIVE YEAR PLAN

2. Sir, Delhi Urban Environment and Infrastructure Improvement Project (DUEIIP) – 2021 was placed on the table of the House in March, 2001. The findings and recommendations of DUEIIP-2021 have been taken into account in preparation of the 10th Five Year Plan of Delhi. Some of the major policy recommendations of the Project can be implemented only by the Government of India and our Government is pursuing the matter.

3. Sir, our approach to the 10th Five Year Plan is to promote sustainable development, accelerate economic growth, create new socio-economic opportunities, ensure delivery of improved civic services – all within the overarching theme of providing good governance.

4. Sir, outlay for the 10th Five Year Plan of Delhi has been fixed by the Planning Commission at Rs.23000 crore at 2001-02 prices. This outlay is about 68% higher than the anticipated expenditure of the 9th Five Year Plan. One of the distinctive features of the Tenth Five Year Plan of Delhi is that only 21% of the outlay will be financed from debt and 79% from non-debt resources as compared to 47% debt financing of Ninth Five Year Plan.

REFORMS IN GOVERNANCE

5. Sir, reforms are critical to improving governance. The Government of Delhi is committed to provide a major thrust on reforms in critical sectors, improved efficiency of service delivery systems, enhancing technical capability and capacity building. It implies comprehensive training of the officers at national and international institutions to develop key technical and managerial competencies and harness latest technologies. The reform process will also ensure outsourcing of various activities to improve performance quality and cost efficiency.

6. Sir, our Government is committed to intensify peoples’ participation in the city’s development and governance. The Right to Information Act implemented by the Government reflects our approach in this direction. Bhagidari project of the Government has been appreciated by the Government of India and graded as a role model for people’s participation in development and governance. One of the thrust areas of the 10th Five Year Plan is to intensify and broaden the base of the Bhagidari approach.

7. Sir, we have already initiated reforms in the Power Sector. We are now in the process of unbundling DVB into six successor companies i.e. one generation company, one transmission company, three distribution companies and one holding company. The process of restructuring of DVB and privatization of distribution of electricity is likely to be completed shortly.

8. As a result of Power Sector Reforms, the Delhi Government will spend only 15 percent of 10th Plan outlay on Energy Sector as compared to 26 percent spent in 9th Plan. The 11 percent of plan outlay saved from Energy sector will inter-alia be invested under Education, Health, Transport and Water Supply sectors. The share of Education, Health, Transport and Water Supply will increase from 47 percent in 9th Plan to about 59 percent in 10th Five Year Plan.

9. To improve the quality of life of Citizens of Delhi, we need huge investment in social infrastructure like education, social welfare etc. It is no secret that utilities like DJB, DTC & DVB are a drain on our resources. Year after year we lend huge amount to these organizations without proportionate benefit. Sir, we are planning to extend sectoral reforms to Transport, Water Supply & Sanitation, and Health Sectors during 10th Five Year Plan. With the privatization of DVB we expect release of large chunk of funds to be invested in other important sectors. To improve the level of public transport, water supply and sanitation facilities, we are taking up privatization and re-structuring exercise in DTC & DJB. A consultant has already been appointed to study the functioning of DJB and recommend suitable steps to re-structure it. A similar exercise would be taken up in respect of D.T.C.

10. Sir, the overwhelming victory of Congress in the MCD elections is a testimony of people’s trust in the policies and approach of our Government. Delhi Government had been very liberal in providing assistance to MCD for improvement of civic services, which is evident from the fact that our Government released an amount of Rs.3049 Crore during last 3 years to MCD as compared to Rs.2922 Crore released during 5 years of previous Government. Unfortunately, the level of civic services could not be improved by MCD to the targeted level. Sir, I have through my earlier budget speeches emphasized the full financial support of Government of Delhi to MCD to improve education system and sanitation in Delhi. Sir, we also suggested formulation of a mutually binding action plan to help MCD in this task. However, instead of appreciating our cooperative approach it was turned into a political issue. With the changed political setup in MCD, our Government expects that the new leadership of MCD will tackle the problems of the people with more positive and aggressive attitude. Sir, we will provide MCD all the administrative backup and guidance to improve civic amenities.

11. Sir, I assure this Hon’ble House, and through this House the People of Delhi, that there will be no shortage of funds in matters relating to improvement of civic services in Delhi.

12. I will now touch upon some of the priority programmes and sectors.

TRANSPORT

13. Sir, I submitted before this august House in my Budget Speech in March 2001 that we had launched a massive programme for construction of flyovers to promote safer and faster traffic movement in the city. Today it gives me immense pleasure to inform that 8 flyovers have already been completed and 8 more are going to be completed during 2002-03. Our target is to make ring road free from traffic signals for uninterrupted flow of traffic by constructing remaining flyovers. I am sure, with the construction of these flyovers, citizens of Delhi will find it easier to reach their destination in shortest possible time.

14. Sir, speed is the essence of Metropolitan life throughout the world. In important cities of the world MRTS are built to ensure fast, safe and comfortable movement of citizens. Sir, it is a matter of pleasure that the first corridor of the Delhi MRTS, between Shahdara-Tees Hazari, will become functional from December, 2002. The schedule of commissioning of other corridors of the phase-I of the MRTS has been given in detail in the Economic Survey of Delhi, 2001-02 presented in the House on 28th March, 2002. Keeping in view the large number of commuters traveling from West Delhi to Connaught Place, our Government has decided to provide a Metro Corridor linking Connaught Place to Patel Nagar, Raja Garden, Tilak Nagar, Janakpuri & Dwarka as a part of Phase-I of MRTS. Sir, this will provide a vital linkage to the developing area of Dwarka to the centre of the City. It will be 23.16 km long corridor partly underground and partly elevated. It is also proposed to take up feasibility study for second phase of MRTS in 2002-03.

15. Sir, in my Budget Speech in March 2001, I had mentioned about Regional-Rail-Network. The job of preparing detailed feasibility report has been assigned to the RITES in August, 2001. RITES will submit the DFR by July, 2002. Ministry of UD, Ministry of Railways and Governments of Haryana and U.P. are other stakeholders in this project. Ghaziabad, Sahibabad and Gurgaon will be linked with the dedicated rail corridors under phase-I of this project.

16. Sir, at the initiative of the Chief-Minister, the Government of India has agreed to start construction of Western Peripheral Expressway as a highway project through National Highway Authority of India.

17. Sir, making roads of Delhi of world class standards is the commitment of our Government and to achieve this objective, an outlay of Rs.899.19 crore is proposed in 2002-03 for Transport sector as compared to Rs. 636.60 crore in 2001-02 – an increase of 41%. ENERGY

18. Mr. Speaker Sir, the power consumption is increasing rapidly in Delhi and it is expected to go up from 2879 MW in August, 2001 to 3100 MW during ensuing summer. However, electricity generation from DVB plants and BTPS meet only 36% of total demand. Delhi is dependent on Central Power Stations and Northern Grid for most of its energy requirements. To improve the situation, our Government is making all out efforts for early commissioning of Pragati Power Plant which will generate 330 MW of electricity. The work on the last section of 400 KV line, Bamnauli- Ballabgarh, which was held up for a long time, will be completed now by December, 2002.

WATER SUPPLY & SANITATION

19. In the framework of development adopted by the Government of Delhi for the 10th Five Year Plan, Water Supply and Sanitation Sector now ranks second after Transport. The outlay for Water Supply and Sanitation Sector in the 10th Five Year Plan has been enhanced to Rs. 3766.00 crore as compared to Rs.1882.27 crore expenditure in Ninth Five Plan – an increase of 100%.

20. In order to augment availability of raw water, Government has decided to invest Rs.380 crore in three years on construction of Pucca parallel channel from Munak to Haiderpur. The work will be executed by Haryana Government for which an amount of Rs.20 crore has already been paid. On Completion of this channel, we will be able to augment raw water supply by 80 MGD.

21. Recognizing the importance of river Yamuna, our Government is planning to constitute Yamuna River Authority to take care of all issues like pollution, encroachment on river bed, flood control, storage of flood water, beautification and development of the river banks, etc.

22. The proposed outlay for 2002-03 for Water Supply and Sanitation Sector is Rs.592.87 crore as compared to Rs.488.24 crore in 2001-02.

ENVIRONMENT

23. Mr. Speaker, Sir, it is a matter of satisfaction that with the efforts made so far by our Government, there has been significant reduction in the level of concentration of RSPM by 15%, Carbon Mono-oxide by 34% and Sulphur dioxide by 11% in the year 2001 in Delhi as compared to the level of the year 2000 as per the report of Central Pollution Control Board.

24. The present level of pollution in river Yamuna is a matter of concern for us all. Government is planning to conduct a feasibility study on installation of suitable treatment mechanism on the outfalls of all 18 major drains falling in river Yamuna.

25. Major pollutant to the river Yamuna is domestic wastewater. About 45% of the total population in Delhi is residing in unplanned settlements where sewerage system is not available. A large number of public toilets are being constructed in such areas to stop open defecation.

26. Sir, Delhi is the first State in the country which has brought out “State of Environment Report-2001”. Nine more ambient air quality monitoring stations will be set up to cover more areas under the air quality monitoring system.

NATIONAL CAPITAL REGI0N

27. Mr. Speaker, Sir, the National Capital Region could not progress as per Regional Plan-2001 due to various reasons. Our Government has requested the Government of India to assign due priority to the development of National Capital Region during the 10th Five Year Plan. The Government of Delhi proposes to contribute Rs.250 crore in NCR Development Fund during the 10th Five Year Plan. However, I may assure this House that this contribution may be raised further provided the Government of India and the concerned States also come forward with a commitment for developing the region in a time bound manner.

JJ CLUSTERS

28. Mr. Speaker, Sir, our Government is looking into the problem of JJ Cluster households in totality with the provision of minimum civic services, in-situ upgradation and relocation of the JJ cluster households from the project sites. It is proposed to integrate all the related schemes like financial assistance for construction of houses at relocated sites under “Valmiki Ambedkar Malin Basti Awas Yojna”, water and sanitation facilities under "Nirmal Bharat Abhiyan" in addition to plan schemes of DJB and Slum wing, health care, primary education, ICDS projects and income generating schemes of the respective Departments. This total package of all schemes will improve the living conditions for the urban poor in all the JJ clusters. An amount of Rs.114 crore is proposed for these schemes in Annual Plan 2002-03

DEVELOPMENT OF SUB-STANDARD AREAS

29. Sir, Hon'ble Members have expressed their concern a number of times over the issue of poor level of civic amenities in the sub-standard areas comprising JJ Resettlement Colonies, Urban Villages, Regularised-Unauthorised Colonies and Unauthorised Colonies. Till March, 2002 more than Rs.1800 crore have been released to improve the civic amenities in these areas of Delhi. However, the progress is not satisfactory as till now only a casual approach was being followed in taking up developmental works in these areas. Now our Government has decided to prepare total area development plan for each municipal ward and funds will be provided according to action plan for implementation of these area development plans. A provision of Rs.177 crore has been made in Annual Plan 2002-03 to speed up the pace of developmental programmes in these areas in a planned manner.

SOLID WASTE MANAGEMENT

30. Mr. Speaker, Sir, the solid waste disposal in a city with a population of more than 14 million can be managed only with a multi-dimensional approach which should include minimization of garbage generation, use of modern and improved mechanical inputs, effective implementation of Solid Waste Disposal Management Rules, public cooperation, involvement of private sector with adequate incentives, development and management of sanitary landfill sites on scientific lines. MCD is being advised to improve its solid waste disposal system on these lines. Delhi Government is pursuing the matter with the NCR Planning Board for development of new sanitary landfill sites in the NCR area which may take care of the disposal of solid waste both from Delhi and the adjoining towns of the NCR.

HEALTH

31. Mr. Speaker Sir, our Government is committed to provide preventive, curative and promotive health services to the citizens of Delhi. Health sector allocation in the Tenth Five Year Plan is Rs.2381.50 crore as compared to Rs.1056.61 crore expenditure in Ninth Plan – an increase of 125%.

32. With the setting up of new hospitals and expansion of existing hospitals, about 800 new beds will be added during 2002-03. Separate counters are being set up in all Government hospitals for women under Stree-Shakti Programme.

33. To improve the patient care services, the Government has launched Total Quality Management Programme as a pilot project in the G. B. Pant Hospital. This will be extended to all hospitals of Government of Delhi during 2002-03. Government is committed to make hospitals people friendly and present their best human face while dealing with patients. The proposed outlay for 2002-03 for Health sector is Rs. 389.70 crore as compared to Rs. 333.41 crore in 2001-02.

EDUCATION AND SPORTS

34. Mr. Speaker, Sir, qualitative improvement in education is one of the main objectives of our Tenth Five Year Plan. We conducted an evaluation study of MCD schools and suggested corrective actions. Unfortunately, MCD simply politicalized these findings and no improvement could be achieved. Sir, Primary education has been on top of the agenda of our Government. At our initiative a new scheme to upgrade 2 primary schools in each of the Municipal Wards as model schools was launched and additional funds provided. Our Government has a dream to change the face and character of MCD primary schools. Each and every MCD primary school must be developed as a model primary school. Sir, I now hope that the new leadership of Municipal Corporation will make more efforts to fulfil our dream about primary education.

35. Computer Science as a subject at 10+2 stage will be expanded to cover 740 schools in 2002-03. The allocation for computer courses in government schools has increased nearly three times from Rs.8 crore in 2001-02 to Rs.23 crore in 2002-03. The vocational education scheme will be reviewed so as to increase the employment potential of the vocational courses.

36. I am happy to inform the august House that our Government has included a new plan scheme to provide one time grant for preservation of heritage and old buildings of Delhi University and Colleges managed by private trusts with a provision of Rs.25 crore in 10th Five Year Plan. Two new hostels will be constructed for University girl students.

37. Our Government attaches high priority to the promotion of Sports. Directorate of Education is providing sports and coaching facilities to school students. For comprehensive development of sports infrastructure and promotion of sports activities in Delhi, we are planning to formulate a sports policy and to establish a State Level Sports Academy during 2002-03. For Education and Sports an outlay of Rs. 338.30 crore is proposed for 2002-03 as compared to Rs. 261.90 crore in 2001-02 – an increase of 29%.

RURAL DEVELOPMENT AND AFFORESTATION

38. For the development of Rural areas an allocation of Rs. 144.42 crore is proposed for the year 2002-03 which includes Rs.50.00 crore for improvement of Rural Roads and development of villages by MCD.

39. Forest Department, alongwith other agencies, is making efforts to increase the green cover. During 2001-02, Forest department has planted over 3.30 lakh saplings. In order to check the level of pollution in Delhi, Forest Department is developing green belts in 200 acres of land in Yamuna river bed, Gazipur and Najafgarh drains and various other places. 900 acres of land of Bhatti mines area is being rehabilitated by planting trees and by taking up water conservation measures.

WELFARE PROGRAMMES

40. Mr. Speaker, Sir, our Government is fully committed to Welfare of SC, ST, OBC, Minorities, Women, Children, Handicapped and Senior Citizens. It is evident from the fact that as against the Ninth Plan likely expenditure of Rs.283.40 crore, plan outlay for welfare schemes in Tenth Five Year Plan is Rs.682.80 crore - an increase of 141%.

41. Mr. Speaker, Sir, the Advocates Welfare Fund Act 2001 has become effective from November, 2001. Government shall make an appropriate one-time contribution to the fund.

42. Senior Citizen State Policy is being prepared so as to maximize the welfare of senior citizens. The Government proposes to issue smart cards to the senior citizens, which would help them in availing various services and facilities being provided by different Government departments. Old age homes will be constructed at Alipur, Dwarka, Rohini and Kanti Nagar.

43. Under the scheme of Bhagidari-Stree Shakti in Social Welfare Sector, Government proposes to improve the welfare services through effective collaboration of concerned Government departments with NGOs to provide complete package of services for empowerment of women. For all these welfare programmes an outlay of Rs. 112.40 crore is proposed for 2002-03 as compared to Rs. 93.06 crore in 2001-02.

TOURISM AND CULTURE

44. Mr. Speaker, Sir, Delhi truly reflects the splendid cultural diversity of India. People with diverse religions, languages, customs and culture from all over the World are living here. In order to develop this city as the cultural capital of the country our Government proposes to come out with a comprehensive cultural and entertainment policy during 2002-03. The policy would aim at synthesis of culture, entertainment and tourism with a view to creating employment opportunities and stimulate economic growth.

45. I shall now turn to tax proposals.

SALES TAX

46. Mr. Speaker, Sir, Sales tax is an ad valorem tax and revenues are directly dependent on factors such as the growth in per capita income, the inflation rate and growth in population. As is well known, there has been a country-wide recession this year. Economic growth has been sluggish. Inflation, too, has been running at an all time low. It is not surprising that sales tax collections have suffered in nearly all the States. Last year, we experienced a growth rate of 44%, which increased our collection to Rs 3379 Crores. Growth on such a high base would have been a challenge in itself. I feel privileged to inform the House that notwithstanding the serious adverse economic circumstances, we are expecting a growth in revenue of above 9% this year.

47. Mr. Speaker Sir, it was our long-standing demand with the Central Government that Delhi should be placed at par with other states in respect of Central Sales tax matters. While other states were having powers and were exempting ‘C’ Forms, thus causing adverse impact on Delhi’s trade and revenues, Delhi government did not have any such powers. I am happy to inform this house that with our persistent efforts, the Central government has introduced a legislation to amend the Central Sales Tax Act to make C form compulsory and to withdraw powers of state government to exempt C form. This would not only help us in increasing the revenues by curbing the tax evasions, but also would promote legitimate and honest business in the country. On behalf of Delhi government, I thank the Hon’ble Finance Minister of India for accepting our request and bringing in the legislation for amending the CST Act.

UNIFORM SALES TAX

48. Mr. Speaker Sir, our government introduced the Uniform Sales tax (UST) regime in Delhi in the year 2000. It has been my consistent effort to ensure that adoption of this policy is not at the cost of the distributive character of Delhi. When neighbouring States infringed the commitment to adhere to UST, I was compelled to make a number of deviations from the uniform floor rate structure. My government believes that there should not be any departures from the rate structure across the States. Only then can business take decisions on economic rationale and not discretionary tax benefits. Due to our efforts in the meetings of the Empowered Committee, neighbouring States have appreciated our problems and complied with the UST wherever there were deviations. At present, I am pleased to inform you that we have been able to achieve near parity in tax rates in the Northern region and we have pegged Delhi at the floor rate in respect of almost all the commodities.

VALUE ADDED TAX

49. Mr. Speaker Sir, we all know that Value Added Tax or VAT is the most progressive form of consumption taxation and has number of benefits for the country’s economy and our trade competitiveness. If we compare it with the present form of retail sales taxation, as it is prevalent in Delhi, VAT will bring several reliefs to our business community. To name a few, -

  1. There are no statutory forms in VAT.

  2. In VAT, set off is given for all business inputs and thus, it removes possibility of cascading & double taxation.

  3. VAT prevents evasion of tax by self-policing methods and thus creates favourable environment for honest businesses.

  4. In VAT, Assessments are done completely on self-assessment basis, and tax is to be paid, and even refunds are issued, purely on self- assessments.

  5. VAT simplifies a number of administrative requirements for dealers such as requirement of items on Registration certificates. Even requirement of compulsory registration for small businesses is done away with.

  6. VAT removes the tax burden from the businesses, and creates an environment where businesses can easily pass on the tax burden on the customers.

  7. The Exports including Interstate exports are fully zero rated. That is the entire local tax charged is either refunded or set off. Hence, VAT would reinforce the distributive character of Delhi.

50. In accordance with the decisions of the Empowered Committee of States, our Government had made full preparation for the introduction of the Value Added Tax from 1st April, 2002. However, the consensus of the Empowered Committee finally was to postpone implementation by a year, and we reluctantly agreed to go along with this consensus.

51. In the run-up to introducing VAT on 1 April, 2003, we were the first in India to release our draft bill for consultation with taxpayers. We also organised dealer consultation workshops to get feedback from our clients, the tax paying community, Legal practitioners and other professionals. Some very good suggestions have been received, and some of which, that are under our active consideration, are as follow

  1. VAT should be packaged along with a reduction in CST rate for all inter-state exports (against C forms) from Delhi

  2. Exporters and inter-state exporters should be given the facility of monthly refunds on the basis of self assessment;

  3. The threshold for mandatory registration under VAT should be set sufficiently high so as to free small dealers from registration but without jeopardising revenue goals.

52. Mr. Speaker Sir, I wish to assure this house that we will ensure that the proposed VAT policy will not only be able to preserve but also promote the distributive character of Delhi. I also wish to clarify that the proposed Right to Use Tax and the existing Works Contract Tax, will all be merged into VAT, when the VAT law comes into force.

SUMMARY ASSESSMENT

53. Mr. Speaker Sir, since the last three years my government has been trying to widen the scope of summary assessment so that maximum number of dealers could opt for self-assessment. Last year I had increased the eligibility condition for Summary assessment to Rs. 75 Lakhs. In order to provide this facility to more and more traders, I propose to increase the eligibility condition to Rs. 1 Crore.

REGISTRATION CAMPS

54. Mr. Speaker Sir, during the last 4 years, the department has been successfully organizing a number of registration camps in major markets every year. Now I propose to widen the concept and have directed the department to organise similar camps for amendment purposes.

COMPUTERISATION

55. Mr. Speaker Sir, I am happy to inform you that the development of the on-line system has been completed and almost all modules have already been put into operation. On behalf of this government, I wish to congratulate all staff of the sales tax department, who have supported our efforts to provide better and efficient services to our taxpayers. The department shall now undertake further development of the computerised system, keeping in mind the transition to VAT. Hardware and software shall be upgraded to meet the requirements of VAT.

STATUTORY FORMS

56. Mr. Speaker, Sir, it has been a consistent effort of my government to simplify procedures and reduce paperwork. Accordingly, in my last budget, I had increased the limit of transactions that can be covered in one statutory declaration form to 30 Lakh. We have a computerized system available now, through which on-line form verification has been made possible. This has given me courage to simplify the matter further and to propose a further increase in the limit to Rs. 50 lakh.

TAX PROPOSALS

57. Mr. Speaker Sir, there is a need to raise additional resources to meet the huge development needs of the NCT. I firmly believe that a lot can be achieved by rationalization and simplification of the tax structure and widening the tax base. Mr. Speaker Sir, I now present my tax proposals.

  1. Sir, in last year’s budget, this House passed a bill for levy of Luxury Tax on certain items. Given the prevailing economic recession the Act was not put into force. This year I propose to enforce the Luxury Tax on a selected list of commodities, viz, cigarettes, gutka/pan-masala (without tobacco), smoking mixtures and other tobacco/tobacco products. These items shall be taxed at 20%. I also propose to impose luxury tax on gutka/pan-masala (with tobacco) at the rate of 50%. However, no tax is proposed to be imposed on Bidi, and tobacco used in hukkah.

  2. Sir, the Central Government has amended the Central Sales Tax Act to incorporate ‘Transfer of right to use’ within the ambit of definition of ‘sale’. Presently, the ‘Transfer of right to use’ is not taxable in Delhi, while almost all other states have brought it within the ambit of taxation. With the amendment in the Central Sales Tax Act, it has become all the more necessary to remove this anomaly because in effect it has made ‘Transfer of right to use’ taxable in inter-state sales, while it remains not taxable under local sale. Hence, I shall be seeking the approval of this house on my bill for taxing the ‘Transfer of right to use’ in the current session, which could not be passed in last year’s budget session because of unforeseen circumstances.

  3. Sir, there are some items where Delhi has been charging tax at a rate, which are above floor rates. I propose to rationalize the tax rate on Mobile telephones from 12% to 4% and on Lubricants from 20% to 12%.

  4. Sir, there is an anomaly in the UST prescribed structure in respect of de-oiled cake and poultry feed. While poultry feed is at zero floor, de-oiled cake, which is also a poultry feed is at 4% floor. This is causing confusion and ambiguity in the tax schedules. Hence I propose to rationalise the structure and exempt de-oiled cake and bring it at par with the poultry feed.

  5. Sir, in the month of September last year, I had withdrawn exemption on undergarments on the ground that West Bengal & other states had complied with the floor rate. I am informed that some states have introduced composition/refund schemes, to the disadvantage of our traders. I therefore propose to re-introduce exemption on undergarments (i.e. underwear, vests, panties and brassieres) having MRP upto Rs. 100.

  6. Sir, in order to reduce the burden on the vehicle owners at the time of conversion of commercial vehicles to CNG, we had granted an exemption from sales tax on CNG. This has led to reduction of tax collection from conventional fuel, such as diesel. Hence, I propose to levy a nominal 4% tax on CNG from this year to partly compensate for the revenue loss.

  7. Sir, Delhi is an island of tax exemption on food grains and food grain products in Northern India. It has been decided by the Empowered Committee to introduce a 4% tax on all foodgrains and foodgrain products. Therefore, in partial compliance, I propose to levy a 4% tax on Foodgrains, Cereals, Pulses and processed Foodgrains, Cereals, Pulses only when sold packed and under a brand name. But wheat flour (Atta) will continue to be exempt.

  8. Sir, In order to protect the vanaspati trade in Delhi from the imported vanaspati, I propose to increase the tax rate on imported vanaspati from present 4% to 12%.

  9. Sir, there is an anamoly in our list of kirana Items. I propose to rationalise the entry in respect of amla, bahera, harad, shikakai, rattan-jot & khusk pudina by shifting them from ‘kirana’ entry to ‘Medicinal Herbs’ entry.

  10. Sir, Paper has been fixed at a floor rate of 8%. However, some of the neighbouring states are charging 4% tax on it. I therefore, propose to reduce the tax rate on Paper from present 8% to 4%.

  11. Sir, with a view to help students in pursuing their education, I propose to exempt writing instruments having MRP upto Rs. 100 from payment of sales tax.

  12. Sir, to encourage Oil Industry in Delhi, so that citizens of Delhi can have access to pure and safe oil, I propose to continue to tax oil cake at last point. Manufacturers of oil cake will not have to pay any tax.

58. Sir, these measures will result in additional revenue to the tune of Rs 20 Crores in the current financial year.

ENTERTAINMENT TAX

59. Mr. Speaker, Sir, I have in the earlier part of my speech mentioned about the decision of the Government to evolve a cultural and entertainment policy for Delhi. As a first step and in order to inculcate the outdoor culture amongst our children who are the citizens of tomorrow, I propose to exempt Entertainment Tax for children upto 15 years for facilities used at Fun Parks. I hope the availability of such a tax free facility would encourage our younger generation to take part in sports and other outdoor activities in a big way.

60. Sir, with a view to encourage tourism, I have decided that luxury tax on hotels will continue to be charged @10% for another six months i.e. upto 30th September, this year.

61. Sir, this august House is more than aware of the problems facing the average citizen of Delhi. It is in order to mitigate these difficulties that more than 85% of plan outlay has been earmarked for areas like transport, energy, education, health, water supply & sanitation and other areas of urban development. Our dream is to have a city where every child can go to school, enjoy pollution free surroundings, good health and convenient means of communication. Delhi is repeatedly recognized as a city with great potential for development and a favourite haunt for fresh investment. Through my budget proposals I have attempted to provide a level of services, which would attract not only the tourists but also the entrepreneurs so as to generate opportunities. I seek the cooperation of this house in developing Delhi as a world class city, a city which is worthy of being the capital of not only a great country like India but which can be the focal point of activity for the whole world.

62. Sir, I look forward to the guidance of this House in achieving the objectives which have been set out in my budget proposals.


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