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Mahanta gives Assam Rs 7 billion deficit budget

Assam Chief Minister Prafulla Kumar Mahanta has presented a Rs 7.62 billion deficit budget for the 1998-99 financial year.

He plans to cover the deficit through fresh taxes (to the tune of around Rs 600 million), revision of oil royalty, reimbursement of security-related expenditure and increase in the share of central taxes.

Taking into account the opening deficit of Rs 1.35 billion, 1998-99 is anticipated to close with an overall deficit of Rs 7.62 billion.

The chief minister, who holds the finance portfolio, proposed additional taxes on big dealers and the marketing oil company, and raising professional taxes as well as the tax on specialised land.

As a populist measure, he proposed to reduce the sales tax on an array of consumer durbables, computers, fax machines and cement and steel items.

Mahanta informed the House that militancy, terrorism and insurgency had adversely affected Assam's economy. But due to the sustained effort of the government, normalcy has been restored to a large extent, and the economy salvaged. In fact, he said, it was showing encouraging signs of growth.

The state government proposed to impose an additional tax on the tax payable or paid by big dealers whose taxable turnover in a year exceeds Rs 300,000. The rate of this additional tax would be 10 per cent on the amount of tax payable or paid by such dealers, with the condition that this tax shall not be recovered from the purchasers.

Further, the government proposed to amend the relevant provisions of the Assam Government Sales Tax to make the marketing oil company liable to tax on the sale of petroleum products.

Offering some respite to the middle class, the chief minister proposed to reduce local sales tax to four per cent for commodities like medical equipment, furniture, refrigerators and air conditioners, water supply and sanitary fittings, computers, fax machines, fire fighting equipment, electrical goods, cement, water filters, wax emulsions, carbon brushes, fabricated steel and iron items, corrugatged paper sheets and boxes, steel, wooden aluminium doors and frames.

The rate of the professional tax has been raised from Rs 1,536 to Rs 2,260 per annum. And the exemption limit of annual gross income to Rs 42,000.

UNI

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