Gandhinagar: While planning to levy green cess on power generation, Gujarat Finance Minister Vajubhai Vala proposed to increase the Value Added Tax (VAT) on tobacco, mobile phones in the state budget presented on Friday.

Projecting a revenue surplus of Rs 443.44 crore and a fiscal deficit of Rs 14,279 crore, Vala presented a budget of Rs 80,694 crore for the 2011-12 financial year.
The budget size has shot up by Rs 11,129 crore as compared to last year's Rs 69,565 crore, showing an increase of 16 per cent.

Vala, in his 17th budget tabled in the state assembly on Friday, proposed to increase the Value Added Tax (VAT) on tobacco and related products from 20 per cent to 25 per cent while that on mobiles has been increased from 5 per cent to 15 per cent. He also levied a green cess on per unit generation of all kinds of electric energy, including captive energy.

The Government will charge two paise per unit on generation of all kinds of electrical energy, including captive energy, but excluding solar, wind, bio, geo-thermal, tidal and hydal energy. The amount collected from the 'green cess' will be used for setting up "Green Energy fund".

"The government experts hope to mop up Rs 524 crore by the levy of new taxes and green cess," Vala said.

Thrusts of the budget were social sector development, urban infrastructure and power sector.