Diesel vehicles, furnishings and suitings will cost more, while bicycles, kerosene stoves and lanterns will become cheaper under the new tax proposals unveiled in the Delhi budget on Tuesday.

Presenting the Rs 27,067-crore budget proposals, the Delhi Chief Minister, Ms Sheila Dixit proposed an additional 25 per cent tax on diesel-propelled vehicles specified in Schedule-I of the Motor Vehicle Taxation Act 2004.

“Many studies have pointed out that in spite of the use of compressed natural gas in all public transport vehicles and also by many private vehicles in Delhi, the growing number of diesel vehicles is adding to air pollution,” she said.

The first Delhi Chief Minister to present the budget, Ms Dixit earmarked a Plan outlay of Rs 13,600 crore and non-Plan expenditure of Rs 13,307 crore. Out of Rs 27,067 crore, the government proposes to fund Rs 20,246 crore from tax collections, of which Rs 14,500 crore will be garnered through value added tax (VAT), she added.

Terming cycling as a “healthier option”, she proposed VAT exemption on bicycles with an MRP up to Rs 3,500. Similarly, kerosene stoves, lanterns, petromax lamps will be exempted from VAT, as also khandsari sugar and textiles.

Sanitary napkins costing up to Rs 20 have also been exempted from VAT.

VAT PROPOSALS

To mop up resources, industrial textiles, canvas belts, filter clothes and furnishing and suitings will be taxed at five per cent, Ms Dixit said.

A 12.5 per cent VAT on unmanufactured tobacco has also been proposed, making bidis and hookah smoking more expensive, as also on sweetmeats and ‘namkeen’ from the existing five per cent.

Ms Dixit announced a total of 14,000 new staff in schools and enhanced scholarships for students. A total of 27 lakh school-going children will be covered under ‘Universal Free Health Scheme’ for which a corpus of Rs 100 crore has been set aside. She also increased the local area development fund for MLAs from Rs 2 crore to Rs 2.5 crore.

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