Thiruvananthapuram: In a first for an Indian state, the Kerala government has imposed a "fat tax" on consumers eating junk food like pizza, burgers and tacos.
A fat tax of 14.5% would be imposed on branded restaurants selling food like pizzas, burgers, tacos, doughnuts, sandwiches, pasta, burger patty and bread-filling. Fast-food chains like McDonalds, Dominos, Pizza Hut, Subway among others are likely to see the new tax imposed on them.
The budget, the first by the Pinarayi Vijayan-led government which came to power in the May assembly polls, also proposed a slew of new tax proposals including 5% on certain packed foods and a 'fat tax' of 14.5% for burgers, pizzas and pastas served in branded restaurants.
Stating that the state was passing through a severe financial crisis due to various factors, the budget proposed an 'anti-slowdown package' of Rs 12,000 crore for taking up various development and infrastructure projects like roads, bridges and IT parks.
The budget, presented by state Finance Minister TM Thomas Isaac, also said steps would be taken to increase the tax revenue by 25% per annum by various measures including elimination of corruption and implementation of trader-friendly measures.
"Steps would be taken to attract Rs one lakh crore investment in various sectors in the next five years," he said.
The government is committed to continue various welfare measures for the downtrodden, Isaac said, adding that the budget increased the amount of all welfare pensions to Rs 1,000 and an amount of Rs 1,000 crore has been earmarked for this purpose.
"This enhanced pension from June will be distributed to the beneficiaries along with one month advance," he said.
In his three-hour-long speech, the state Finance Minister said the public distribution system would be expanded by including families of National Rural Employment Guarantee Scheme workers under free ration scheme, now limited to BPL families.
An additional amount of Rs 300 crore has been earmarked for this, he said, adding that Rs 75 crore has been kept aside for checking price rise of essential commodities.
Detailing steps to be taken to strengthen public education system, he said by the next five years, a government school in all the 140 assembly constituencies would be upgraded to international standards and Rs 1,000 crore has been earmarked for it.
"A total of Rs 250 crore is expected for the purpose this year," he said. "The project will be implemented in cooperation with certain foundations who come forward to support the scheme."
"The budget, as part of resource mobilisation, levied a tax of 5% on packed wheat products like atta, maida, suji and rava and packed basmati rice. An additional revenue of Rs 60 crore is envisaged through this," he said.
In a bid to check the inflow of edible oils from other states in the guise of coconut oil, the budget proposed a 5% tax on coconut oil. An additional Rs 150 crore is expected from this.
He also added that the additional revenue, received through this, would be used completely for the procurement of coconuts in the state. The floor price of coconuts would be increased from Rs 25 to Rs 27.
"The proposed 'fat tax' of 14.5% for burgers, pizzas and pastas served in branded restaurants would target an additional revenue of Rs 10 crore," he said.
The VAT on textile has been increased from one to two per cent to garner an additional revenue of Rs 50 crore.
The stamp duty on land registration has been increased to 8% from the present 6%.
Isaac said the new stamp duty hike is justifiable as there is an increase in the 'capital gains' due to rise in the land value.
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