Chandigarh: Soft drinks and Cigarettes will cost more in Punjab effective from April 1, with the state government hiking the Value Added Tax (VAT) in the Rs 460.21 crore deficit Budget presented in the state assembly in Chandigarh on Wednesday.

Finance Minister Parminder Singh Dhindsa presented the budget for 2013-14 even as the opposition Congress members abstained from the House for the sixth successive day, holding a "mock session" outside the Assembly complex to protest suspension of their nine members last week.

Dhindsa proposed to abolish 5.5 percent VAT on items used by children, senior citizens and the poor. The children items include school bags, pencils, erasers, sharpeners, geometry box, colours and crayons, water bottle, feeding bottles and nipples.

Those for senior citizens include hearing aids, intra ocular lens, sticks and other walking support items for the senior citizens, while the items of poor exempted from VAT include Madhani (Lassi maker), Lemon squeezer, roller and rolling pins (chakla belan), mat, brooms, pawa (used in cots), comb, hairpin and hair clippers.

In order to mop up Rs 180 crore during the financial year, Dhindsa proposed to hike VAT on cigarettes by 144 percent, hiking it from 22.55 percent to 55 percent, including a 10 percent surcharge. This will yield the state Rs 100 crore annually, Dhindsa said.

The VAT on soft drinks has been hiked from 13 percent to 20.5 percent which will get the state Rs 80 crore per annum. Dhindsa said that the total budget for 2013-14 would be of Rs 69,051.78 crore and the financial year would commence with a deficit of Rs 420.25 crore, a deficit of Rs 460.21crore.

The Annual Plan for next year has been fixed at Rs 16,123 crore against Rs 14,000 crore in previous year an increase of 15 percent.

The plan focuses on development of infrastructure in power, roads, rural water supply and sanitation, health and education, Dhindsa added.


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