In an effort to mop up additional revenue for the debt-stressed state, West Bengal Finance Minister Amit Mitra Monday raised both the minimum and upper ceiling on Value Added Tax (VAT) by one percentage point each in his budget for 2013-14.
The lower VAT rate has now gone up to five percent from four percent.
"I propose to raise the lower VAT rate from 4 percent to 5 percent. I propose to raise the upper VAT rate by a small amount of 1 percent," said Mitra.
He hoped the additional resources generated will help to build social and physical infrastructure and spur economic growth through the "Keynesian multiplier effect, benefitting businesses greatly", while common people will get better infrastructure, schooling and health facilities.
The budget proposed an annual plan outlay of Rs.26,674 crore, 14.13 percent higher than the figure last year, with the deficit estimated at Rs.8 crore.
Mitra said the state would exceed its tax collection target by Rs.1,000 crore from Rs.31,000 crore to Rs.32,000 crore in 2012-13.
He said while tax collection rose by 30 percent in 2012-13, the present government has increased tax revenue by Rs.11,000 crore during its 22-month stint so far as against the figure during the waning years of the previous left Front government.
Mitra fixed a 22.77 percent growth in "garnering our own tax revenues" in 2013-14.
The minister claimed the state has also surpassed its target of creating ten lakh additional jobs proposed in the last budget.
"Between April 2012 and January 2013, new employment generated was estimated at 10,24,521, crossing our target. By March end this figure will further swell," he said.
He also announced a target of generating 13,14,000 new jobs during 2013-14.
In a sop to the unemployed youth ahead of the coming panchayat polls, Mitra announced a new scheme 'Yuba Utsaha Prakalpa' under which one lakh youths registered with the employment bank and in the age group of 18-45 years would be provided an allowance of Rs.1,500 per month.
The budget also raised the exemption limit of profession tax from Rs.5,000 to Rs.7,000.