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Karnataka Budget: Fuel and Alcohol Turn Costlier

These are hard times for Siddaramaiah because of drought and farmers suicides

Vijay Grover
Publish Date: Mar 18 2016 9:35PM | Updated Date: Mar 19 2016 2:08PM

Karnataka Budget: Fuel and Alcohol Turn Costlier

Caught amid worst drought in four decades and consequent rise in farmer suicides, Karnataka is dogged by the spectre of economic slowdown. This grim reality has not escaped Karnataka Chief Minister S Siddaramaiah. He holds the charge of Finance. And, thus, hid Budget presented on Friday (March 18) tried to pander to the rural sector.

 Presenting the budget for the eleventh time in his political career, Siddaramaiah abolished the income agriculture tax. It was earlier levied on commercial crops like coffee, tea, rubber and their plantations. The budget which has enhanced thrust on the rural economy on the lines of the Central Budget and holds the promise to revive the rural economy.

 Politicians throughout the country are a superstitious lot, and those from Karnataka are particularly known for meticulously sticking to the ‘auspicious time’ for any major political activity. But breaking from the tradition, Siddaramaiah presented the Budget during the “Rahu-Kaalam”, a certain period of the day considered inauspicious by many Hindus. The Chief Minister’s unconventional move irked many in the Opposition. The BJP legislators felt it was done intentionally to hurt and provoke them.


With an allocation of Rs. 1,30,758 crore,  the budget looks to balance the economy hit by drought last year. It is for the first time in the history of Karnataka that agricultural production has taken such a nosedive with 134 taluks being declared drought affected. The farm production dwindled to 110 lakh tonnes in 2015 from 126 lakh tonnes the previous year. Suicide by over 1000 farmers in the past one year has put a question mark on the commitment of the Government towards them. So despite the challenges of making provisions for the expansion of budget outlay by over 7 percent in the coming year, the agriculture sector has been given a major 18 percent share of allocations.


New schemes were announced for the farmers, with an assurance to put nearly one lakh farmers under the Chief Minister’s micro-irrigation project. "We are trying to integrate rural economy with impetus on employment generation. We hope the scheme to give 75 percent subsidy for farming families. It will ensure that there is an alternate revenue stream available."


While IT sector continues to be the big employment generator in the urban space, the Government is looking to it to boost employment further. The other sector that got the attention of the Chief Minister is skill development. With a proposal to benefit from the Centre's vision, the State is planning to develop a skill development board with allocation of Rs 500 crore.


Bengaluru city infrastructure which has been found wanting on several counts finally got some attention from the State Government with the city getting a total of Rs 4222 crore. With elevated roads, Metro expansion and modern road designs under the Tender-SURE project, citizens of Bengaluru can look forward to relief from endemic congestion on the roads of the city.


Yet, the Opposition does not seem to be impressed with the budget. Basavaraj Bommai, former Minister for Irrigation and Water Resources told Policy Pulse, “The Chief Minister has got his priorities wrong. The farmers of North Karnataka need help. There is no assurance that has come from the Chief Minister to generate employment in rural areas where the farmers have no work.”


The youth are at the centre of the Government's plans in this budget. The Budget has provided construction of wrestling Akharas and Kabaddi development centres in all districts. The promise of three more medical colleges in the State will expand the seats available for higher, more so medical, studies.


The common man, however, seems to be getting set for the burden which is bound to fall on his shoulders with the increase in petrol and diesel prices. The petrol prices go up by Rs 1.89 a litre and diesel by Rs 0.98. A little relief, however, came with helmets being made cheaper as VAT was reduced on them to 5.5 percent from thus far 14.5 percent. The State has recently made it mandatory for pillion riders to wear helmets. Alcohol the favourite beverage of the Finance Minister didn’t get spared to shore up revenue with Siddaramaiah hiking excise duty on all types of liquor and beer to meet the shortfall in revenues.


Even while his jugglery didn’t create much impact, the challenge before Chief Minister is to ensure that the revenues grow up to cope with the rising expectations and to keep the rise in debt at bay.