New Delhi: While eschewing any major changes in taxation, the Delhi state government increased value added tax (VAT) on tobacco and gutkha products from 12.5% to 20% and reduced the luxury tax levied on hotels from 12.5% to 10% to boost the sagging tourism sector, in its annual budget presented by state finance minister A. K. Walia on Monday.

The increase in VAT does not apply to unmarked tobacco, beedis or tobacco used for their manufacture.

The state’s tax revenues grew 3.38% from Rs11,782.80 crore to Rs12,180.70 crore.

The state budgeted for total expenditure of Rs23,043 crore as against estimates of Rs16,156 crore in tax revenues for 2009-10.

Walia also said that all 11 corridors planned under the second phase of the Delhi Metro would be completed before October 2010. At least 17 road over bridges would be constructed within that time frame as well, the minister announced.

The allocation for water supply and sanitation works in each of Delhi’s 70 assembly constituencies was doubled from Rs50 lakh to Rs1 crore. An outlay of Rs2,105 crore (including Rs1,000 crore additional central assistance) was earmarked for the Commonwealth Games related infrastructure projects.