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Karnataka Budget: More tax on fuel, liquor as govt focuses on infra boost

Presenting the budget in the assembly, Chief Minister B S Yediyurappa announced tax on petrol would be increased from 32 per cent to 35 per cent and diesel from 21 per cent to 24 per cent.

Written by Ralph Alex Arakal , Darshan Devaiah BP | Bengaluru | Updated: March 5, 2020 8:58:39 pm
b s yediyurappa, karnataka budget, vidhana soudha Karnataka Chief Minister BS Yediyurappa presents the State Budget 2020-21 at Karnataka Assembly, in Bengaluru, Thursday, March 5, 2020. (PTI Photo)

Prices of liquor, diesel, and petrol are set to increase from April 1 in Karnataka as the BJP government allocated a lion’s share to various infrastructure projects in the state in the state Budget for fiscal 2020-21.

Presenting the Budget in the Vidhana Soudha, Chief Minister B S Yediyurappa said, “I propose to increase the existing rates of Additional Excise Duty on India Made Liquor (IML) by 6 per cent across all 18 slabs.”

The government had fixed a revenue target of Rs 20,950 crore for the Excise Department for the year 2019-20. At the end of February, Rs 19,701 crore has been collected. For fiscal year 2020-21, the government has fixed the target of Rs 22,700 crore.

“With this and with effective enforcement and regulatory measures, the department would be achieving the target of Rs.22,700 crore fixed for the financial year 2020-21,” Yediyurappa added.

Existing and proposed excise duty rates on IML

Speaking to indianexpress.com, S Guruswamy, president, Federation of Wine Merchants Association, Karnataka said, “The increase rates of 6 per cent across all 18 slabs will only affect the business few days, later we hope business will pick up. Mainly the consumers will be affected due to increase in price, not sellers. It has become routine for the governments to increase the excise duty on IML in every budget.”

Hiked tax on petrol and diesel

Yediyurappa also announced an increase in tax on petrol to 35% from 32% and diesel to 24% from 21%. This would translate to an increase of Rs 1.60 per litre of petrol and Rs 1.59 on diesel.

“Karnataka has always done well with regard to resource mobilization for developmental activities. In this regard, I propose to increase rate of tax on petrol from 32% to 35% and diesel from 21% to 24%. By this measure, there will be increase in price of petrol by Rs 1.60 per litre and that of diesel by Rs 1.59 per litre. Even after this increase, the price in Karnataka will be comparable to other neighbouring states,” Yediyurappa said in his budget speech.

The revenue collection target for the Commercial Taxes Department for the year 2020-21 is fixed at Rs 82,443 crore.

Focus on infrastructure

In a bid to decongest traffic in capital city Bengaluru, Yediyurappa announced Rs 14,500 crore towards developing the outer ring road in the city.

“The construction of 56 km long Outer Ring Road from Central Silk Board junction to Bengaluru International Airport via KR Puram and Hebbal at an estimated cost of Rs 14,500 crore will be commenced during the year 2020-21,” he said.

The CM also mentioned the importance the Bengaluru as the key driver of state’s economy. “Half of the contribution of Karnataka GSDP (Gross State Domestic Product) comes from Bengaluru alone. People from different states come to Bengaluru for their livelihood. Therefore, it is imperative to give special attention for Bengaluru for the sake of economic development of the state and country,” he said.

Rs 500 crore for Bengaluru suburban rail project

The CM further emphasised on the need of strengthening public transport system in the city. “For this, suburban railway project at an expenditure of Rs 18,000 crore in the Central Government budget has been declared. During 2020-21, a grant of Rs 500 crore will be earmarked to this project from the state government,” he said.

Welcoming the move, Bangalore Central MP P C Mohan said, “This will give a fillip to the much needed mass transportation project for Bengaluru.”

Responding to the same, Srinivas Alavilli, citizen activist and co-founder of Citizens for Bengaluru, a civic group questioned why the Centre is “blocking the suburban rail project” even after waiting for several years. “Budget announcements aside, we know what’s stopping this. You really need to get the CCEA approval. Why is the Center blocking our suburban train project after so many years of wait? It doesn’t make any sense. you worked on this for many years. See it through,” he wrote on Twitter.

BMTC to get 1500 new buses

In addition to this, the government has allocated Rs 600 crores for purchasing 1500 new diesel buses for the Bangalore Metropolitan Transport Corporation (BMTC). Besides this, the government allocated another Rs 100 crore to buy 500 ordinary electric buses to complement 300 air-conditioned electric buses that will be added to the BMTC fleet under the central government’s FAME-2 scheme.

While bus commuters in the city welcome the decision, they have criticised the government for not announcing a fare cut for BMTC tickets, despite submitting results of a recent survey to the government.

The Bengaluru Bus Prayaanikara Vedike (BBPV), a community forum for bus commuters in the city tweeted, “Happy that free pass has been announced for 1 lakh garment workers. But we have lakhs more workers who suffer from high fares. Why not fare cut across the board as we demanded?”

The budget also mentioned the use of electric buses as metro feeders, construction of road cross-over facility for pedestrians in 24 metro stations, and implementation of an ‘Electric Bike Taxi’ project.

Rs 25,000 for unemployed SC/ST youth to buy bikes

The state government has decided to earmark Rs 2.5 crore to unemployed youth from backward classes to purchase bikes to work as delivery boys. “Nowadays, it is common to have e-commerce companies deliver products at the doorstep. A financial assistance of Rs.2.50 crore will be given to 1000 young men at Rs 25,000 each, to purchase bikes through D. Devraj Urs Backward Classes Development Corporation,” Yediyurappa said.

While a total of Rs 8,772 crore has been allocated for Bengaluru’s development for the fiscal year 2020-21, other major highlights include allocation of:

* Rs 999 crore for ‘Shubhra Bengaluru’ a solid waste management scheme
* Rs 100 crore (in addition to Rs 317 crore earmarked earlier) for development of lakes
* Rs 200 crore to fill major gaps in city’s stormwater drain network
* Rs 500 crore to restore roads in 110 villages merged to city
* Rs 1000 crore to rejuvenate old sewage treatment plants
* Rs 66 crore to raise 100-foot high bronze statue of Kempegowda in Bengaluru airport premises

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