In a first, ‘Fat tax’ for junk food proposed in Kerala budget

The government of Kerala imposed a “fat tax” on fattening foods – including tacos, burgers, pizza, pasta and doughnuts.

Kerala has also levied a 5 per cent tax on packaged wheat products like atta, maida, suji, rava and packaged basmati rice.

In the past, a fat tax has been imposed by countries like Denmark and Hungary to fight obesity.

While giving budget speech, Minister said that second coir restructuring scheme would be brought in and 10 percent subsidy for coir treatment factories would be provided, apart from this Rs100 crore for modernisation of cashew factories would be given.

Pinarayi Vijayan assumed office on May 25 this year and Issac returned as the Finance Minister, a post that he held when V.S. Achuthanandan ruled the state during 2006-11. The government has allocated around Rs 300 crore for the aforementioned scheme.

“A total of Rs 250 crore is expected for the objective this year”, he said.

The white paper had also stated that with Kerala holding a negative cash balance in reality, it was an impossible task to take on immediate and short-term liabilities of over Rs 10,000 crore. Isaac defended the levy, saying that the revenues from it will be earmarked for procurement of copra from coconut growers. An additional Rs 150 crore is expected from this.

According to India’s NewsX channel, the population of Kerala has welcomed the government’s initiative, expressing hope that “this step… will definitely be significant in countering the increasing health problems and also the funds generated could be utilized for something better”.

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.