Taking a cue from the West, Kerala is all set to introduce what it terms as a “fat tax” of 14.5% for foods judged to be unhealthy. Food items like pizzas, burgers, doughnuts, pasta, and bread-fillings served in branded fast-food chains like McDonald’s, Dominos, Pizza Hut and Subway, among others, are likely to see the new tax imposed on them.
The state government has also made consumption of ready-to-eat chapatis dearer with the introduction of a 5% tax on wheat products in packets.
The CPI (M)-led LDF government in Kerala on Friday presented its budget for 2016-17, focusing on strengthening social welfare schemes, public health and education. The host of people-friendly announcements include free uniforms for students of aided schools, home for all in five years and land for tribals.
[related-post]
State finance Minister TM Thomas Isaac has announced a Rs 12,000-crore stimulus package for the next five years. In his characteristic “spend-big, create jobs” flourish. Isaac says that Rs 2,500 crore out of this jumbo package will be pumped into the economy in the current year itself to beat the downturn.
Kerala will create a special agency to pool together Rs 20,000-crore corpus to feed the stimulus package. The onus of this corpus would be on a specially created commission, named Iftac. The creation of this corpus will be hinged on the state government’s credibility to gather deposits from the public. A comprehensive legislation will be effected to set up this fund-raising mechanism for boosting infrastructure and stimulating jobs and income.
“The funds raised for the stimulus package will not be deposited in the state treasury. This will be non-budgetary income. A portion of the motor vehicle tax and petroleum products tax will be bundled into this corpus. Since contractors will get their payment from this corpus, they will not have to approach State Treasury,” says Isaac in his two-hour, 24-minute speech.
Transgenders , women and the elderly population have a lot to cheer in the budget. Transgenders are to get special education concessions and schools will have good toilets for girls. Transgenders aged above 60 will be given a pension amount. All labourers aged 60 and above will get a pension amount.
Meanwhile, the LDF government is going ahead with the Vizhinjam International Seaport project signed with Adani Ports, a four-lane road project, the GAIL pipeline project and airport development. The infrastructure support funds for the project will be drawn from the newly created corpus.
As much as Rs 5,000 crore has been earmarked for infrastructure projects, and in the current budget, a Rs 1,000-crore outlay has been made for Kochi-Coimbatore hi tech corridor in the current fiscal. An amount of Rs 1,300-crore has been set aside for development of the IT sector.
LDF Government will also spend big on social welfare schemes. Rs 1,000-crore funds has been set aside for grooming a school of international standard each in each of the 140 constituencies. A scheme will be introduced for frequent screening for diagnosis and free treatment of all diseases. All houses will have water supply, electricity and toilets Rs 50 crore has been allotted to build public toilets.
Motor tax on freight vehicles has been hiked by 10%, making Chennai and Bengaluru travel costlier. The Kerala government has clamped green tax on four-wheelers older than 10 years. Tourist buses will have to pay higher motor tax. If arrears on motor taxes are not filed in six months, the vehicle will be confiscated, warns the budget speech. Those with arrears for five years can go for OTS (one time settlement) of 30% for light vehicles and 20% for heavy vehicles.
The state has hiked taxes by 2% on garments and 5% on coconut oil and packed wheat products like ready-to-eat chappatis. Tax on cinema ticket, life-saving medicines, concrete doorframes and scrap batteries have been trimmed. “There’ll be no water-cess for the next five years,” says the budget.
