Budget proposals for BJP's re-election

Budget proposals for BJP's re-election

Rather than populist measures, the budget must allocate substantial funding for social development.

By presenting a prudent budget, chief minister Jagadish Shettar, who is also the finance minister, can redeem the image of his government and go to the polls with utmost confidence. To accomplish his task, he must shun yesteryear strategy of populism and put forward proposals that can remove the ghost of poor governance and show a promise of making amends if given another chance. Here are some proposals that can make a direct impact on voters and swing the election. They will substantially benefit the six crore people of the state as well as voters of all communities, age groups, professions and incomes.

Reduce taxes on petroleum products – The Goa BJP government did it after election. Karnataka government must do it before the election. A 10 per cent reduction in sales tax and abolishing entry tax will lead to drop petrol and diesel prices approximately by Rs 8 and Rs 5. It will be the biggest relief that government could provide at this crucial juncture to endear itself to the voters who are reeling under sky high inflation for the past several years. The resultant loss of revenue can quite easily be offset in plan expenditure or savings found elsewhere in an Rs 1.2 Lakh Crore budget.

Rollback VAT – Value Added Tax (VAT) at the time BJP took office was at 12.5 per cent. It was raised twice to pay for natural calamities – once for the floods in North Karnataka and again last year for drought. Construction of houses for people affected by floods has already been completed and drought was less than severe which allowed our elected representatives to go on a worldwide junket. Rolling back VAT to 2008 levels will be buoyant for the economy.

Impose a residency clause on real estate buyers – Gold and real estate have been speculators’ paradise over the last decade. While Central government is in the process of curtailing speculative investment in gold, state government should do the same in real estate. Too many black money holders along with Non Resident Indians have been entering real estate market across the state to double and triple their money in a short period of time. Prices of homes for most of middle class and poor have become unaffordable partly due to inflation but mostly due to aggressive acquiring of land by builders to meet the rising appetite of property investor. It’s time to put an end to speculation and give long time dwellers of the state an opportunity to own a home at an affordable price. State government must impose a residency clause of say 5 years in the forthcoming budget on buyers of property.

Reform Agriculture – Rural Karnataka needs to be transformed. Announce agriculture reforms in the budget like contract farming, master plan for water resource, modifying APMC Act etc and formulate an excellent communication strategy to deliver the message to farmers on benefits. Majority of people living and working in farms will likely choose development over populist schemes like free power, interest rate reduction or loan waivers. Reforming agriculture will immensely benefit both producers and consumers as well as revitalise farming.

Announce financial help to municipalities– Rapid urbanisation has led to a resource crunch in many of the municipalities that have them in a catch-22 situation. They are unable to raise resources to deliver the level of service people expect while citizens are frustrated and angry because of poor service delivery. A portion of revenues from central government transfer and part of road tax collected by the state government must be distributed to the local bodies across the state on an agreeable formula based on a measurable parameter like population or consumption. It will be music to the ears of urban voters.

Move away from social welfare to social development – The need of the hour for inclusive growth is social development. Karnataka’s literacy rate is just 66 per cent and mortality rate is 45 per 1000. Almost 50 per cent of the houses do not have toilets and government run schools and hospitals are in extremely poor condition. Revamping of PDS system is also desperately needed. Rather than announcing a slew of populist measures, the budget must allocate substantial funding for social development. Like Urban India, aspirations of Rural India are also aligned with development and thus promise of education, health and robust PDS are likely to be big vote getters.

Lowering taxes, reforming rural Karnataka, making housing affordable, improving civic amenities and investing in social development are top priorities in the minds of people. BJP should seize the budget opportunity to make a real impact on voters that will improve its electoral prospects in the short run but more importantly will benefit the state economy in the long run.

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