Budget: HDK offers a mixed bag

Chief Minister HD Kumaraswamy, who also holds the finance portfolio, managed to present his maiden budget on Thursday, overcoming stiff initial opposition from within to the exercise as the previous government of its coalition partner Congress had presented one just four months ago. Kumaraswamy has come up with some innovative ideas, no doubt, but the overall effect on the people is that they have to bear additional taxes. Having committed himself in his party’s manifesto to an ill-advised “complete farm loan waiver,” the chief minister settled to waiving crop loans up to Rs 2 lakh, availed by individual farmers till December 31, 2017. Even that is going to cost a whopping Rs 34,000 crore, to be spread over four years. For the current year, he has made a provision of Rs 10,500 crore. To pay for that, he has raised the cess on petrol and diesel by 2-3%, hiking their prices by over Re 1 per litre, imposed 4% additional excise duty and increased electricity charges by 20 paise per unit. All these measures are bound to stoke inflation at a time the prices of essential commodities are already on the rise. Kumaraswamy’s defence that petrol and diesel prices in neighbouring states are still higher does not hold water. People are already reeling under excessive taxation and there was a need for reducing them.

On the positive side, the government proposes to start some new industries to not only beat back the competition from Chinese goods, but also create jobs in rural areas. Adopting a ‘Compete with China’ policy, Kalaburgi is to be developed as a ‘solar district’, with manufacturing facilities for solar panels, inverters, capacitors and laminators, an LED light manufacturing unit is to come up in Chitradurga, an integrated circuit board manufacturing factory in Mysuru, an electronic toys unit in Koppal, a smartphone components recycling factory at Chikkaballapur and a sports and fitness equipment manufacturing facility in Tumakuru. All these goods have export potential as well and the government is hopeful of getting private sector investment. But, the idea of developing a Disneyland park at KRS dam looks ill-conceived.

People of Bengaluru, who produce over 65% of the state’s GSDP, have little to cheer about in the budget. After mentioning the need for six elevated corridors under Namma Metro Phase 3 at a total cost of Rs 15,825 crore, the chief minister made a provision of only Rs 1,000 crore for the current year and no timeframe for completion. The government is offering Rs 100 crore additional grant to BMTC, which is wholly inadequate when the bus service provider is reeling under a loss of over Rs 600 crore, overburdened with offering free passes to students and others.