Kerala Finance Minister Thomas Issac has proposed additional taxes in the revised budget on packaged foods, coconut oil and a 'fat tax' on fast food items sold in restaurant chains across the state. This is an effort to mobilise Rs. 850 crore.
The minister expects to raise revenue of Rs. 10 crore from the 'fat tax' of 14.5 percent on food items like pizzas, sandwiches and pastas, reads the Hindu report. An additional five per cent tax will be applicable to packaged food items made of wheat, semolina and maida. A 20 per cent tax on disposable plastic glasses was also announced, says the report.
Out of Rs. 850 crore, a five per cent levy on coconut oil is estimated to fetch Rs. 150 crore, while the minister aims to raise Rs. 50 crore by increasing the tax on textiles from one to two percent.
Issac cited the decline in growth rate below national average in a first in the last two decades as the reason for the additional taxes.
The quick estimate of Gross State Domestic Product for the year 2014-15 released by the state planning board pegs Kerala's growth at 6.67 percent.
The finance minister said the state's estimated income deficit is around Rs. 13,066 crore for 2016-17 and warned that the deficit could rise to as much as Rs. 20,000 crore by the end of the current fiscal if no measures are taken.
A stimulus package to the tune of Rs. 12,000 crore was also announced to revive the economy by undertaking huge infrastructure projects.