Shillong, Mar 22 (IANS): Alcohol is set to become dearer in Meghalaya as Chief Minister Mukul Sangma Monday presented a deficit budget for 2011-12 and proposed fresh taxes to bridge the gap between expenditure and revenue.

"For 2011-12, I have estimated the total expenditure at Rs.6,264 crore, an increase of 26 percent over the current year," the chief minister said.

To raise additional funds for meeting increasing developmental expenditure in the new fiscal, the chief minister announced that the value added tax (VAT) has been raised for the both the slabs -- from 4 percent to 5 percent and 12.5 percent to 13.5 percent.

The collections under the Meghalaya Tax on Luxuries (Hotels and Lodging Houses) Act will be streamlined by registration of all hotels and lodging houses and reclassifying them in accordance with their tariffs, he added.

The chief minister said projects with an outlay of Rs.337 crore have been proposed under the non-lapsable central pool of resources. Projects with an outlay of Rs.102.60 crore have been proposed under the North Eastern Council.

The government also proposed tax reforms on items covered under the department of excise, forest and minerals to generate additional revenue.

The budget left alcohol users with little to cheer about. Alcohol would cost more with the government announcing an ad volarem levy on wine, rum and beer.

The excise department is one of the highest revenue generators in the state. The department's revenue collection is likely to cross the Rs.100 crore mark for the first time by the end of this fiscal.