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Karunanidhi sops IT industry with 5.37 billion deficit budget

Tamil Nadu Chief Minister M Karunanidhi, who holds the finance portfolio, has presented a Rs 5.37 billion deficit budget for 1998-99.

The bill, which proposes additional taxation to net Rs 3.4 billion, displays a fair amount of tax relief and a slight pay hike.

The overall budget deficit for 1997-98, estimated earlier at Rs 4.98 billion, was reduced to Rs 33.1 million because of a greater revenue collection of Rs 134.18 billion against the estimated Rs 126.41 billion, the chief minister said.

While employees in government and local bodies have something to cheer with the chief minister's new pay scales (which doubles the house rent allowance), the monthly pension for disadvantaged sections has been raised from Rs 100 to Rs 150.

The information technology industry which is making rapid progress in the state gets the biggest sop -- sales tax exemption for computer software.

The tax on Indian Made Foreign Liquor has been raised from 30 to 40 per cent, and that on foreign liquor from 60 to 70 per cent.

The tax on pan masala has been increased from 20 to 30 per cent.

Amusement parks have been levied a 20 per cent tax on collections, of which 90 per cent would go to local bodies.

Tax on sale of manmade fibre has been reduced from eight to two per cent.

The budget proposes changes in the structure of additional sales tax payable by companies having headquarters in Tamil Nadu.

Companies with a taxable turnover between Rs 250 million to Rs 500 million will be subject to an additional tax of 1.5 per cent, and those with a taxable turnover between Rs 500 million and Rs 10 billion, an additional sales tax of 2 per cent. There will be no tax liability for companies with taxable turnover below Rs 250 million.

It is proposed to accept accounts of traders with sales turnover between Rs 1 million and Rs 2 million on the basis of audit and certification by a chartered accountant. Ten per cent of these cases will be test-checked by the department. It is also proposed to raise the turnover limit for registration of traders from Rs 75,000 to Rs 150,000. More than 19,000 small traders will be benefited by these measures.

Entry tax on vehicles of non-dealers has been raised to the level of dealers as purchase of vehicles outside the state continues. New vehicles will be subjected to lifetime tax, while existing ones would have the option to pay life time or annual tax.

Interstate sale of notebooks, which was taxed earlier, has been exempted.

The chief minister announced tax reductions on several items: copra from 2 per cent to one per cent, non branded food products from 8 to 4 per cent, non branded masala powder and hollow blocks from 16 to 4 per cent and branded masala powder and ice cream from 16 to 11 per cent.

Total tax exemption for cooking oil, and intraocular lens, kasini kerai used for medicinal purpose and deoiled rice is also proposed.

Karunanidhi also announced a Rs 500,000 grant for publishing the Tamil translations of the Das Kapital and Theories of surplus value of Karl Marx.

The government nationalised all the works of the late Thiruvi Kalyanasundaram, Tamil scholar and veteran trade union leader, who was an associate of both Mahatma Gandhi and Periyar E V Ramasamy Naicker. His descendants are to be paid Rs 2 million.

Karunanidhi also announced a Rs 2 million grant for nationalising the fictional works of freedom fighter Kalki R Krishnamurthy.

Further, the budget contains provisions for a Rs 200,000 grant to the family of Dravidian movement writer Ilangovan.

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