Kerala Government slams 14.5% 'Fat Tax' on junk food; First of its kind in India

Kerala, state with the highest literacy rate has decided to impose five per cent tax on certain packed foods and a 'fat tax' of 14.5 per cent for burgers, pizzas and pastas served in branded restaurants. The move certainly came as a shock to multi-national food chains such as McDonalds, Pizza Hut, Dominos etc. The CPI(M)-led LDF government is expected to generate revenue of Rs 10 crore from the recently included tax structure.

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.

In the recently presented state budget, TM Thomas Isaac, Finance Minister, Kerala said that steps would be taken to increase the tax revenue by 25 per cent per annum by various measures including elimination of corruption and implementation of trader-friendly measures. The government will be working closely to chalk down the plans and policies to attract Rs one lakh crore investment in various sectors in the next five years.

While presenting the budget, Finance Minister also elaborated on expanding the public distribution system he stated that 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. The government has allocated around Rs 300 crore for the aforementioned scheme.