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Delhi budget: More revenue for education

VAT on sweets, footwear, satchels, marble, e-rickshaws and hybrid cars reduced from 12.5% to 5%

Policy Pulse
Publish Date: Mar 29 2016 11:19AM | Updated Date: Mar 29 2016 5:25PM

Delhi budget: More revenue for education

The Aam Aadmi Party (AAP) government in Delhi on Monday presented Budget 2016-17 with a rationalised value added tax (VAT) structure, reducing the prices of readymade garments, shoes, watches, sweets, snacks, and electric and hybrid vehicles.

The Arvind Kejriwal-led government said it has had a 17 per cent growth in tax revenue, 31 per cent in excise and 21 per cent in stamp duty in 2015-16. The Rs 46,600-crore Budget for FY17, presented by Deputy Chief Minister and Finance Minister Manish Sisodia, pegs the Plan outlay at Rs 20,600 crore. In keeping with the AAP manifesto, education, health and transport sectors got a lion's share of the total allocation.
"The government is committed to reducing tax arbitrage and will attempt to keep a uniform rate with neighbouring states," said Sisodia. VAT has been rationalised on all tobacco products, including cigarettes, at a uniform rate of 20 per cent. VAT constitutes 65 per cent of the total tax revenue.
With social sector being a thrust area, education has been allocated Rs 4,645 crore (23 per cent of Plan outlay) which incidentally is the highest share among all expenditure heads. To boost higher education, new campuses of Ambedkar University of Delhi will be constructed at Rohini and Dheerpur.
Elaborating on its three-tier public health road map, the city government said it had allocated Rs 3,200 crore accounting for 16 per cent of the Plan outlay. The government stated it would lay emphasis on setting up 1,000 mohalla clinics by the end of the year.
The government's promise to provide basic facilities received a major thrust in the Budget, which has proposed that drinking water be provided to all authorised and unauthorised colonies by December 2017 through pipelines. For this, Rs 676 crore has been set aside. The government will continue with its scheme of providing 20,000 litres of water free of cost to each residential unit.
On the lines of the 'Amma canteens' set up by the Jayalalithaa government in Tamil Nadu, the Delhi government will introduce 'Aam Aadmi canteens' that would provide meals for Rs 5-10. A sum of Rs 10 crore has been allocated for the construction of these canteens. The transport sector emerged as another priority area, receiving the second highest allocation of 19 per cent of Plan outlay (Rs 3,943 crore). Sisodia also enhanced the one-time fixed subsidy for e-rickshaws from the existing Rs 15,000 to Rs 30,000.
The AAP government has decided to continue with its 50 per cent power subsidy for all consumers using up to 400 units, which covers around 90 per cent of total domestic consumers. A provision of Rs 1,600 crore has been set aside for this.