Finance Minister P Chidambaram on Tuesday said the improvement in tax-GDP ratio has given enough money to the Central government to vastly increase outlays.

The UPA government inherited a tax-to-GDP ratio of 9.2 per cent that has risen to 12.5 per cent in 2007-08. The ratio will be 13 per cent in 2008-09 he said, replying to the debate on the Finance Bill in the Lok Sabha.

The improvement in tax-GDP ratio has been despite cut in customs, excise and in the current budget cut in personal tax rates, he said. More money was being given to the states and Central government outlays have been increased vastly.

The outlay for education in 2003-04 was Rs 7,024 crore (Rs 70.24 billion), which in the current year is Rs 34,400 crore (Rs 344 billion). The outlay for health in 2003-04 was Rs 6,983 crore (Rs 69.83 billion) that in the current year has gone up to Rs 16,534 crore (Rs 165.34 billion), he said.

Chidambaram said the seven-year tax holiday on refineries will end for refineries commissioning after April 1, 2010 instead of April 1, 2009 ,as was announced at the time of presenting the Budget.