However, rice, wheat, flour, maida and suji would cost slightly less because of the tax proposals announced by the deputy chief minister-cum-finance minister, Sushil Kumar Modi, while presenting the state Budget for 2011-12 in the Assembly on Friday. He sought to raise an additional sum of Rs 450 crore by making changes in the existing tax rates on a number of items.
Besides, for the first time, owners of community halls, auditoria of hotels and pandals erected on open spaces to facilitate holding of cultural and social activities, including marriages, would have to pay luxury tax of 10 per cent, which is estimated to yield annual revenue of Rs one crore.
The Budget has increased Value Added Tax (VAT) on all items by one per cent, apart from two per cent hike on existing taxes on select items, which include motorcycles and small cars.
Filing of e-returns mandatory:
The finance minister has made filing of e-returns mandatory from April 1 this year for traders paying taxes of over Rs one lakh. The compounding scheme with regard to brick-kilns would be raised on the higher side.
With total receipts of Rs 65,312 crore, the Rs 65,325.87 crore Budget has a deficit of Rs 13 crore, compared to Rs eight crore in the last financial year.
The state, in the final count, is left with a revenue surplus of Rs 6,272 crore to carry forward developmental and other activities during the 2011-12.
The state finance minister lifted one per cent tax charged earlier on the trade of foodgrains like paddy, rice, wheat, flour, maida and suji, as well as bone mill, which is a fertiliser.
However, four per cent VAT on items listed in Schedule-3 has been increased by one per cent in compliance with the recommendations of the Empowered Committee of States’ finance ministers. Other states had already done it. However, no increase has been made on the four per cent VAT charged on coal, iron, cotton, oilseeds and sugar.
Modi announced one per cent increase in the existing 12.5 per cent tax on consumer items mentioned above. This would bring the operative tax to 13.5 per cent. He made it a point to state that in other states like West Bengal, Gujarat, Rajasthan and Karnataka the operative tax rate is around 15 per cent.
Modi said that the two per cent hike in taxes––from the existing three per cent to five per cent––charged on motorcycles and small cars would yield extra revenue of Rs 40 crore. Besides, the payment of tax for registration of heavy vehicles has also been changed.
Now owners of heavy vehicles weighing less than three tonnes would make one-time payment of tax. The tax structure on vehicles weighing more than three tonnes has been graded into three categories with a view to facilitate increased registration of such vehicles in the state.
CM Sub-regional Development Fund:
Though the state government earlier this year abolished the MLA Local Area Development fund yet the Budget has allotted Rs 644.58 crore for the CM Sub-regional Development Fund in which schemes and projects would be undertaken on the advice of MLAs and MLCs for the development of 243 assembly constituencies and the districts concerned.

The Budget has allotted Rs 3,875 crore for road construction, Rs 3,014 crore for human resource development department, Rs 2,112 crore for water resources, Rs 1,740 crore for social welfare, Rs 1,682 crore for energy department, Rs 1,567 crore for panchayati raj, and Rs 1,293 crore for rural development.

The state would raise Rs 9,088 crore through borrowings.

Money given to students for the purchase of bicycles has been enhanced to Rs 2,500 each from the earlier Rs 2,000, while the grant for the tour programmes of school students had also been increased from Rs 5,000 to Rs 10,000.

Besides, 3.40 crore boys and girls up to the age of 14 years would be provided their health cards.

The Budget has allotted Rs 299 crore for providing foodgrain relief to BPL families left out by the Centre’s formula, which recognises only 65 lakh BPL families in Bihar, while the survey conducted by the state government found well over 1.2 crore BPL families.

The Budget has simplified the entry tax. On the other hand, it also promised to rationalise stamp duty and registration fee to make it at par with other states.

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