CM targets petrol, diesel to mop up revenue

Siddaramaiah hikes levies to fund social welfare schemes, extends benefits to SC, STs

In a bid to fund his brand “Bhagya” schemes and to dole out more sops to SC, STs and other backward classes, Chief Minister Siddaramaiah resorted to imposing additional levies on petrol, diesel, liquor and tobacco products in the 2015-16 State budget.

Like in the past, the chief minister desisted from announcing any big bang initiatives to give the much-needed fillip to infrastructure in Karnataka.

While delivering the three hour budget speech in the Assembly on Friday, Siddaramaiah announced a hike in sales tax on petrol and diesel by one per cent.
 
The price of petrol and diesel will now increase by 50 paise and 46 paise per litre respectively, at current base prices.

Liquor will also get costlier with the hike in excise duty. Cigarettes, cigars, gutkha and other manufactured tobacco products will be dearer with hike in VAT from 17 to 20 per cent.

Prices of expensive alcohol brands are expected to go up by 15 to 20 per cent – approximately Rs 1,000 to Rs 2,000 per bottle.

There will also be a  slight increase in the rates of low-priced liquor brands.
A new “Slum Cess” will be imposed on property tax, but the percentage has not been revealed. Besides, one per cent ad valorem on registration fee on certain sale agreements has been announced.

All these levies are expected to mop up an additional Rs 600 crore to the State exchequer.
Under the “Anna Bhagya Scheme”, the chief minister announced supply of free foodgrain to all 1.07 crore BPL families in the State.

Siddaramaiah has virtually showered SC and STs with monetary benefits by substantially hiking allocation of funds under almost all schemes to please the communities which are up in arms demanding a dalit chief minister.

One lakh houses in rural areas and 50,000 houses in urban areas will be constructed for BPL SC and ST families. In the education sector, incentive for SC and ST students who pass with first class in their first attempt in II PU exams has been increased from Rs 750 to Rs 20,000.

A total allocation of Rs 4,584 crore has been earmarked for the social welfare department.
Faced with revenue shortfall of about Rs 4,976 crore in the current fiscal, Siddaramaiah has announced toll collection on State Highways that are developed under the public-private-partnership mode.

The chief minister has proposed to reduce VAT on manufactured sand to 5.5 per cent to encourage setting up M-sand units as an alternative to natural sand.

Not much for City
Siddaramaiah has not announced any big infrastructure project for Bengaluru, though BBMP elections are around the corner. He has, however,  announced widening of half a dozen roads and skywalks across 25 busy roads.

The total budget outlay is Rs 1,42,534 crore, including a capital expenditure of Rs 20,564 crore. Siddaramaiah also proposed to borrow Rs 22,950 crore, while maintaining fiscal deficit at 2.75 per cent of the State Gross Domestic Product. The revenue surplus stood at Rs 911 crore.