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Tuesday, July 17, 2018

Karnataka budget: CM announces Rs 34,000-crore farm loan waiver, tax hike on fuel and liquor

Karnataka budget: A slew of programmes is proposed for southern Karnataka districts, like Hassan, Ramanagara and Mandya, the strongholds of the JD(S).

Written by Johnson T A | Bengaluru | Updated: July 5, 2018 3:32:04 pm
Karnataka Chief Minister HD Kumaraswamy presented his maiden budget in the Karnataka Assembly on Thursday (Source: Twitter/@CMofKarnataka)

A massive Rs 34000-crore farm loan waiver scheme for loans to the extent of Rs two lakh, a monthly allowance of Rs 1,000 for pregnant women with an allocation of Rs 350 crore a year, and a continuation of all the populist schemes of the previous Congress government. These were among the key features of the Congress-JD(S) coalition government’s maiden budget unveiled by Karnataka Chief Minister H D Kumaraswamy on Thursday.

The Rs 106-crore revenue surplus budget, which balances the political interests of the coalition partners, involves an increase in borrowings to the tune of over Rs 10,000 crore.

The farm loan waiver and allowances to pregnant women were among the key promises made by the JD(S) in its poll manifesto though the allocations to the schemes have been scaled down.

In the first stage, loan defaults till December 31, 2017, will be cleared. An amount of Rs 6,500 crore has been earmarked for the current fiscal year. The families of government officials and farmers who have paid income tax for three years will be outside the purview of the loan waiver scheme.

While an allowance of Rs 6,000 was promised for pregnant women, the JDS Chief Minister announced it will be Rs 1,000 per month while stating that the amount will be increased in a phased manner over the next five years.

The Karnataka CM, who is also the state finance minister, allocated Rs 660 crore to increase the monthly pension for senior citizens from Rs 600 to Rs 1,000. Populist schemes like the distribution of free rice under the Anna Bhagya Programme, started by the previous Congress government headed by Siddaramaiah, will be expanded to provide 500 gm of tur dal, one kg palm oil, one kg salt and one kg sugar at subsidised prices.

A slew of programmes in the new budget is proposed for southern Karnataka districts like Hassan, Ramanagara and Mandya, the strongholds of the JD(S).

A new multi-speciality hospital and a medical college have been proposed for Kumaraswamy’s Ramanagara constituency on the outskirts of Bengaluru.

The Karnataka government has also proposed a Rs 53,000 crore drinking water project for rural areas by sourcing water from local rivers and reservoirs. As part to efforts to increase resource generation to meet the costs of financing the government’s populist schemes, the JD(S)-Congress coalition has announced an increase in taxes on petrol and diesel by Rs 1.14 and Rs 1.12 per litre. Excise tax on liquor has been increased by four per cent across categories. An increase in motor vehicle taxes has also been announced.

“Revenue surplus is estimated to be Rs 106 crore. Fiscal deficit is expected to be Rs 40,753 crore which is 2.89 per cent of the GSDP. Total liabilities at Rs 2,92,220 crore at the end of 2018-19 are estimated to be 20.75 percent of GSDP. This is within the limit of 25 percent for 2018-19 mandated in the Karnataka Fiscal Responsibility Act,” Kumaraswamy said, in his maiden budget speech.

Inputs from PTI

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