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Gujarat cuts VAT on auto fuels, offers tax relief to low earners

Compared to `2.27 lakh crore in FY22, a budgetary outlay (total expenditure) of Rs 2.44 lakh crore has ben made for FY23, with a view to giving an impetus to growth, post the Covid-19 pandemic.

VAT on fuels
Reduction in VAT would decrease the selling price of both the petroleum products by Rs7/litre in the state.

Gujarat finance minister Kanubhai Desai on Thursday presented a populist budget for financial year 2023, ahead of the state assembly elections, by reducing value added tax (VAT) on petrol and diesel by 4.5% and 7.5%, respectively. Reduction in VAT would decrease the selling price of both the petroleum products by Rs7/litre in the state.

Compared to Rs 2.27 lakh crore in FY22, a budgetary outlay (total expenditure) of Rs 2.44 lakh crore has ben made for FY23, with a view to giving an impetus to growth, post the Covid-19 pandemic. Giving relief to the neo-middle class who are wage earners in the public or private sector, Desai proposed that persons who receive salary or wage up Rs 12,000 per month shall be fully exempted from payment of professional tax. “This will provide a relief of Rs 198 crore to nearly 15 lakh middle class taxpayers. As a result, revenue of the state will be reduced by Rs 108 crore,” said the FMin the House.

In the Budget proposal the highest provision of Rs 34,884 crore has been made for the education department. A provision of Rs 1,188 crore under the Mission Schools of Education scheme, to provide infrastructural facilities to different schools in the state with a view to make qualitative improvement in the education system

A total provision of Rs 15,568 crore for the energy & petrochemicals department has been made. Rs 1,046 crore has been allocated to complete the task of providing the remaining agriculture power connections. Keeping in mind the fact that 48% of the state’s population live in cities, the finance minister made a provision of Rs 14,300 crore for the urban development and urban housing sector.

As far as the industries & mines department is concerned Rs 7,030 crore have been allotted for different schemes and development of industries related infrastructure.
Desai proposed Rs 1,450 crore for strengthening the special sectors from among the textile value chain saying that the state government has planned to establish a textile park equipped with modern facilities at Vansi-Borsi in Navsari district to generate large scale employment opportunities. Rs 1,360 crore has been allocated for comprehensive development of MSMEs under financial assistance scheme.

A corpus of Rs 1,000 crore will be created under a start-up venture finance scheme to encourage new entrepreneurs and strengthen the start-up ecosystem. For this, a provision of Rs 200 crore has been done for the next year. A provision of Rs 480 crore for laying deep sea pipelines in highly industrialised Sarigaam, Vapi, Surat and Ankleshwar has been proposed for the disposal of treated water. The finance minister announced Rs 670 crore for the science & technology department that include a provision of Rs 111 crore for the recently announced Gujarat’s IT and BT policies.

A sum of Rs 7,737 crore has been allotted for agriculture, farmers’ welfare and cooperation. Rs 880 crore for fisheries, Rs 5,339 crore for water resources, Rs 6,090 crore for the Narmada project, especially to expand canal network related to Sardar Sarovar Dam, has been allotted. A total provision of Rs 12,240 crore for the health & family has been made for the next fiscal.

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