The Karnataka government today raised additional excise duty to 20 per cent and VAT to 14 per cent in the general budget for 2011-12 and unveiled a first of the kind separate agriculture budget.
A hike in excise and VAT would make goods like fridges, television sets and cement costlier, as also jewellery and articles of gold and other noble metals such as gold and platinum and precious and semi-precious stones.
On other hand, in his unique agriculture budget, Chief Minister B S Yeddyurappa, who also holds finance portfolio, proposed crop loans at 1 per cent and earmarked Rs 17,857 crore for agriculture and allied sectors.
Total receipts are expected to be Rs 83,729 crore -- Rs 66,313 crore of revenue receipts and Rs 17,416 crore of capital receipts.
Total expenditure is estimated to be Rs 85,319 crore (revenue expenditure of Rs 65,034 crore and capital expenditure of Rs 20,285 crore).
As part of the Additional Resource Mobilisation, the government proposed to increase additional excise duty by 10 per cent to 20 per cent across all 17 slabs and on Urban Transport Fund from 10 to 11 per cent, besides increasing composition amount payable in respect of totalisator tax by Bangalore Turf Club from 4 per cent to 8 per cent.
It also proposed changes in VAT from 13.5 per cent to 14 per cent on various goods and on jewellery from one per cent to two per cent.
In his post-budget media briefing, Yeddyurappa said additional revenue of Rs 500 crore would be raised from Commercial Tax, Rs 300 crore from stamps and registration, Rs 200 crore from excise and Rs 20 crore in Motor Vehicle taxes.
Basking in the glory of being the first Chief Minister in the country to present an exclusive agriculture budget, he said, "I took oath in the name of farmers and had nurtured a dream of giving them a separate budget. That dream has now been realised unhindered."
"I hope the Prime Minister and Union Finance Minister will emulate it by presenting an agriculture budget on the lines of the Railway budget", Yeddyurappa said.
He said the rate of interest on crop loans of up to Rs 3 lakh from cooperative institutions would be reduced from 3 per cent to 1 per cent.
The agriculture budget seeks to boost productivity and improve living conditions of farmers, he said, noting that he had stepped up allocation from Rs 11,000 crore in 2010-11 to Rs 17,857 crore in 2011-12.
But opposition Congress leader Siddaramaiah and KPCC President G Parameshwara dubbed the agriculture budget a "gimmick" and the General budget an "election budget".
Yeddyurappa commended the budget proposals which projected Rs 1,279 crore revenue surplus and sought a vote-on-account till July 31.Yeddyurappa announced interest free loan for higher education and plans to organise a Global Agro Investment Meet this June to attract large investments for the farm sector.
The Agriculture policy said the decade from 2011 to 2020 would be declared as "irrigation decade" and aims to take up "jalkranti" for effective utilisation of water resources to mitigate water scarcity in drought prone areas by mobilising Rs 50,000 crore for water resources development.
The Irrigation sector would get Rs 7,800 crore allocation to expedite various irrigation projects.
"I assure people that all schemes towards effective water management will be completed n the next 10 years, thereby increasing the state's agricultural income and also achieving food security", Yeddyurappa said.
The policy among other things promised Rs 1,000 crore for Agriculture Revolving Fund, Rs 3,900 crore for quality power to irrigation pumpsets, Rs 100 crore for regularisation of one lakh illegal pumpsets,Rs 500 crore for developing agricultural infrastructure, Rs 200 crore for organic farming, Rs 125 crore to encourage biofuel,Rs 1000 crore to improve lives of 10 lakh agricultural families under Survarna Bhoomi Yojane scheme.
Under the scheme, applicable only to dry land, farmers with land holding up to two acres will be given financial aid amounting to Rs 10,000 in two instalments, directly through banks or cooperative scoeities to adopt horticulture, sericulture, apiculture and fish farming.
Fulfilling the long pending demand of farmers who have been pressing for permission to brew and sell "neera" from coconut trees, the government said it would set up a neera processing unit in Thumbe, Bantwal taluk of Dakshina Kannada district.
In the 2011-12 General Budget proposals, Yeddyurappa did not announce new programms, but said care has been taken to ensure all round development of the state in all sectors.|
On the Housing sector, he said a scientific survey would be conducted to identify families without sites and 20 lakh families will get ownership certificates.
In the backdrop of anguish by the Christian community over the B K Somasekhara Commission of Inquiry report into the 2008 church attacks, Yeddyurappa announced a Rs 50 crore special grant for development of the community.
The Chief Minister also raised the allocation for minority welfare from Rs 207 crore to Rs 326 crore.
He earmarked Rs five crore for International film festival to be held in the city and increased financial aid for quality film from the present 50 to 75 films.Yeddyurappa said a pay committee would be constituted for considering the government servants request for pay revision.
"The thrust given to agriculture, land and irrigation sector will alleviate the difficulties faced by marginal and medium scale farmers", President of Bangalore Chamber of Commerce and Industry Shekar Viswanathan said.To provide financial security for families of private vehicle drivers such as autorickshaws, bus, maxicab, lorry, taxi and others, the government announced it would introduce a new insurance scheme for them.
The budget also offered sops like reduction of tax on all kitchen utensils from 13.5 per cent to five per cent, exempted tax on coconuts excluding copra, reduced tax on barbed wire from 13.5 per cent to five per cent, besides exempting tax on paddy, rice, wheat, plses and products of rice and wheat for one more year.
Tax on caps will be reduced from 13.5 per cent to five per cent and tax on schools bags of prices upto Rs 500 will be reduced to five per cent, Yeddyurappa said.
Yeddyurappa, whose fiscal management has come under sharp attack from the opposition, proposed disclosure of the government's fiscal position on a quarterly basis on a website of Finance Department, "so that the wrong perception ariisng due to a lack of timely information can be corrected"."I assure this House that the fiscal position of the Government of Karnataka is sound", he declared.
He said the government has been successfully making one of the highest tax efforts in the country, a fact acknowledged by several organisations including RBI.
"The figures will speak for themselves. Let them come and discuss everything on the floor of the house", he said.
Outlay of energy sector has been increased from Rs 6,245 crore in 2010-11 to Rs 8,523 crore in 2011-12, he said and promised Rs 4,770 crore for overall development of Bangalore for providing adequate infrastructure.
"The image of the state has soared high after the Global Investors Meet, but certainly dented in the wake of certain developments. I appeal to the opposition to participate in the assembly proceedings and discuss all the issues", he said, an apparent reference to the disruption of January legislature session by the opposition, who demanded his government's resignation over various scams.
Yeddyurappa walked the distance from his residence to Basaveswara Circle near Vidhana Soudha, the state secretariat and called on farmers and assured them he was keeping up his promise of presenting a separate budget for agriculture.) President of Karnataka Pradesh Congress Committee G Parameshwara termed the agriculture budget "extremely disappointing".
He pointed out that in the name of agriculture budget, Yeddyurappa has clubbed other departments -- Horticulture, Water Resources, Animal Husbandry and Fisheries.
"It's a bundle of false promises", Parameshwara said and argued that there was no justification to call it an agriculture budget.
According to him, allocation for agriculture has merely gone up to 10 per cent of total allocation from last year's seven per cent and that for irrigation from 14 to 18 per cent.
Central government funding to various projects, projected as state-driven ones, is to the tune of 30 per cent, while there are some with World Bank funding component, he noted