In his last full budget before the state goes to polls in 2018, Karnataka chief minister Siddaramaiah on Wednesday stuck to his socialist credentials and pulled out a slew of populist measures directed at the Congress vote base of backward castes, dalits and minorities.
Measures ranging from free laptops for students gaining admission to engineering and medical colleges, compensations for the deaths of cattle and livestock, removal of interest on loans given to women self help groups by co-operative banks, introduction of “Namma canteens” in Bengaluru on the lines of Amma canteens in Tamil Nadu to provide food at low cost, providing eggs two days in a week to all children in anganwadis have all been announced newly in the budget.
Watch |Siddaramiah Reveals Populist Schemes, Removes VAT On Liquor In Karnataka Budget
Other populist schemes introduced by Siddaramaiah in previous budgets since coming to power in 2013 are being persisted with or expanded. The Anna Bhagya scheme first introduced in 2013 which provides free food grains to people below the poverty line will see an increase in the quantity from five kg to seven kg of food grains that an individual is eligible to avail under the scheme. Agriculture loans upto Rs three lakh will remain interest free and loans up to Rs 10 lakh will be given at a three percent rate of interest.
The total estimated expenditure in the budget has been pegged at Rs 1,86,561 crore. The Rs 137 crore revenue surplus budget estimates revenue receipts to be around Rs 1,44, 892 crore and pegs revenue expenditure at Rs 1,44,755 crore. The fiscal deficit of the state is expected to be Rs 33,359 crore which is 2.61 per cent of the Gross State Domestic Product and within fiscal discipline norms.
“Ours is an all inclusive, universal development model with a human face. To supplement this in my last four budgets I have put forth before the people an extensive economic framework for social justice – one of the objectives of our Constitution. I have made an honest effort to further extend and enhance the same in this budget,” Siddaramaiah said in his budget speech on Wednesday.
The Karnataka chief minister criticized the demonetisation exercise carried out by the RBI in November last year and said that the, “entire cooperative sector that is so critical in servicing the farmers and the rural folk virtually came to stand still,” on account of demonetisation.
The biggest impact of demonetisation was witnessed in the collection of stamp duties which fell by 25 percent in the aftermath of demonetisation, he said. Against a revenue target of Rs 9100 crores taxes from the stamps and registration department “we expect shortfall of almost Rs 1350 crores and expect to achieve Rs 7750 crore by March end,” Siddaramaiah said.
The Congress government has not made any major changes in taxes in the state keeping in view the introduction of GST in the next fiscal year, Siddaramaiah said. The collection from commercial taxes has been estimated at Rs 55000 crore under GST compared to an estimated collection of Rs 51338 crore for the current year. The state has however removed Value Added Tax on liquor with effect from April 1 but has increased additional excise duty in some slabs for Indian liquor.
An Economic Survey for the state for the 2016-17 period has revealed a decline in GSDP growth at 6.9 per cent compared to 7.3 per cent in 2015-16. “The cause for decline in overall gowth rate is attributable to decline in growth rate of industry and service sectors,” Siddaramaiah said.
The industry sector growth has been put at 2.2 per cent compared to 4.9 per cent in the previous year while the services sector which has been the back bone for growth in Karnataka’s economy has registered a growth of 8.5 per cent this year compared to 10.4 per cent last year.