'Fat tax' among other pills to cure ailing Kerala economy

CPM-led LDF government in Kerala today presented its budget for 2016-17, focusing on strengthening social welfare schemes, public health and education.

 

The budget, the first by the Pinarayi Vijayan-led government, also proposed a slew of new tax proposals including 5% tax on certain packed foods and a 'fat tax' of 14.5% for burgers, and pizzas served in branded restaurants.

 

Stating that the state was passing through a severe financial crisis due to various factors, the budget proposed an 'anti-slowdown package' of ₹ 12,000 crore for taking up various development and infrastructure projects like roads, bridges and IT parks.

 

The budget, presented by state Finance Minister T M Thomas Isaac, also said steps would be taken to increase the tax revenue by 25% per annum by various measures including the elimination of corruption and implementation of trader-friendly measures.

 

Steps would be taken to attract Rs one lakh crore investment in various sectors in the next five years, he said.

 

The government is committed to continuing various welfare measures for the downtrodden, Isaac said, adding that the budget increased the amount of all welfare pensions to ₹ 1,000, and an amount of ₹ 1,000 crores has been earmarked for this purpose.

 

In his two and a half -hour-long speech, the state finance minister said the public distribution system would be expanded by including families of National Rural Employment Guarantee Scheme workers under free ration scheme, now limited to BPL families.

 

An additional amount of ₹ 300 crores has been earmarked for this, he said, adding that ₹ 75 crores have been kept aside for checking price rise of essential commodities.

 

Detailing steps to be taken to strengthen public education system, he said by the next five years, a government school in all the 140 constituencies would be upgraded to international standards and ₹ 1,000 crores has been earmarked for it.

 

The budget, as part of resource mobilisation, levied a tax of 5% on packed wheat products like atta, maida, suji and rava and packed basmati rice. An additional revenue of ₹ 60 crores is envisaged through this, he said.

 

In a bid to check the inflow of edible oils from other states in the guise of coconut oil, the budget proposed a 5% tax on coconut oil. An additional ₹ 150 crore is expected from this. The floor price of coconuts would be increased from ₹ 25 to ₹ 27, he added.

 

The proposed 'fat tax' of 14.5% for burgers, pizzas and pasta served in branded restaurants would target additional revenue of ₹ 10 crores, he said.

 

The VAT on textile has been increased to 2% to garner an additional revenue of ₹ 50 crores. 

 

The stamp duty on land registration has been increased to 8% from the present 6%. Isaac said the new stamp duty hike is justifiable as there is an increase in the 'capital gains' due to rise in the land value.