Making his 13th appearance, Finance Minister Vajubhai Vala put before the House a financial plan worth Rs 49,860 crore that pushed up rates of Value Added Tax (VAT) to mop up the additional indirect tax collection.

The proposed imposition would translate into an increase of one per cent on goods that presently go with a VAT of four per cent, while the rest would see an increase of 2.5 per cent. The additional tax would not apply to diesel, petrol, declared and exempted goods as per the VAT Act.

The lacklustre Budget also left unanswered the important issue of compensation for the seven Municipal Corporations who lost Rs 1,800 crores worth of revenue on account of octroi removal.

In a small relief, however, Vala let the corporations collect and keep the professional tax they levied. Pegged at Rs 120 crore annually, it is peanuts compared to the actual loss owing to octroi abolition last year.

The Budget has a plan component of Rs 19,030 crores. Of the plan Budget, Rs 8,272 crores are to be spent on social services like health, education, women and child development, housing, drinking water constituting 43 per cent of government's plan expenses.

The revenue surplus, however, showed a decline from Rs 2,339 crore in the revised estimates for last year to Rs 52 crore in Monday's Budget. However, taking into consideration both revenue and capital accounts, the overall deficit is pegged at Rs 116 crore.

In his post-Budget press meet, Vala termed it a "human development" oriented Budget that stressed on health, education, and poverty alleviation. "It focuses on improving the liability of rural areas of the state to prevent rural to urban migration by providing urban facilities at their door steps," Vala said.

Among some of the more important announcements in his speech before the House that saw Opposition walkout (see related story), the Finance Minister proposed setting up a children's university; expansion of the 108 emergency services across the state; increase in the widow’s pension; and extension of Nirmal Gujarat with an increased allocation of Rs 261 crore over Rs 168 crore of last year.

Aimed at intervention in the unorganised sector, the government would come out with a separate policy for the overall development of the sector that would target skill formation of workers and their social security. A comprehensive package of Rs 100 crores would be earmarked for this purpose.