Guwahati, July 19: Assam chief minister Tarun Gogoi today tabled a budget laden with feel-good sops for the floundering tea industry and some succour for those hit by floods, but his proposal to increase sales tax on petrol and diesel raised the possibility of an all-round price hike.
Captains of industry and the Opposition said the increase in sales tax on petrol from 20 to 25 per cent and on diesel from 12 per cent to 15 per cent would surely push up prices of essential commodities.
The chief minister, however, justified the proposed hike, saying it was meant to remove the disparity between sales tax rates in Assam and “most other states”.
Both the AGP and the BJP described the budget as “anti-poor”. It was tabled in the absence of the Opposition, which staged a walkout in protest against the Congress government’s refusal to constitute an Assembly committee to probe the theft of oil from pipelines.
Gogoi exempted residents of the flood-affected areas from paying land revenue for the current fiscal and reduced agriculture income tax by 10 per cent. He increased the outlay for education, though the comparative figures do not reflect the hike.
The outlay for education in the budget for 2004-2005 is Rs 3159.40 crore, as against Rs 3296.44 crore for the last fiscal. The chief minister clarified that the previous figure included Rs 300 crore to clear the salary arrears of teachers. “Without that amount, the allocation would have been Rs 2996.44 crore, which is less than what I have earmarked this year.”
He claimed credit for improving the “educational climate during the last couple of years”, which, he said, was reflected in the results of the matric and higher secondary examinations.
Gogoi admitted that debt servicing was eating into the government’s resources with the total outstandings till April 1 standing at Rs 14,336 crore. He said his government was committed to the task of bringing about fiscal discipline and would soon enact a “fiscal responsibility legislation” as part of the reform process. “I have constituted a task force to prepare a draft bill and a five-member high-power committee to finalise the draft fiscal responsibility bill within this financial year.”
On the power sector, Gogoi said the government had already set in motion the process of revamping the Assam State Electricity Board (ASEB). He said continuation of the reform measures would enable the ASEB and its successor companies to start afresh with “clean balance sheets”.
Raising sales tax on India-made foreign liquor (IMFL) from 20 to 22 per cent, Gogoi said: “I wish I could raise it even higher. But because of the low tax regimes in surrounding states, raising the sales tax on IMFL drastically may be counter-productive from the revenue point of view.”
The tea industry had reason to rejoice with Gogoi reserving the biggest share of his largesse for the sector. There was good news for the Guwahati Tea Auction Centre, too, with the tax on private sales being reduced from 2 to 1 per cent.
Indian Tea Association (ITA) chairman C.K. Dhanuka thanked Gogoi for taking steps to make the industry more competitive. A senior official of a leading tea company echoed him. “The government, despite its limitations, has done whatever it could have done to give the industry some breathing space. The incentives provided are in every sphere and should provide a fillip to the industry.”
The Federation of Industries and Commerce in Northeastern Region (FINER) described the budget as “good and reform-oriented”. Its senior vice-president R.S Joshi said: “With comprehensive reforms in place, the ASEB will have no excuse but to perform.”
Joshi, however, expressed concern over the proposal to increase sales tax on fuel. “It will have a cascading effect on prices of all commodities and needs to be rolled back.”
AGP general secretary Hitendranath Goswami and BJP leader Sujit Biswas voiced similar worries.