Siddaramaiah taxes all classes

State Budget 2016: Petrol, diesel, soft drinks, cable TV, liquor to be dearer

Monthly budget of every household is set to take a hit from April 1 as Chief Minister Siddaramaiah on Friday proposed hike in tax rates on a number of goods and services in Budget 2016-17.

With this, petrol, diesel, soft drinks, cable TV subscription, lease and rent agreements of properties, private transport and liquor will become dearer.

The Budget is bound to pinch families and individuals of all income groups alike. Petrol and diesel prices will go up by Rs 1.89 a litre and Rs 0.98 a litre respectively as the sales tax on them has been increased. This has touched a raw nerve as sales tax on fuel is among the highest in the state.

Indian Made Liquor (IML) and beer will cost more as Excise duty and Additional Excise duty on IML have been hiked substantially. Besides, motor vehicles tax on private transport has been enhanced. The chief minister is expecting to mop up additional Rs 2,300 crore revenue from the increased taxes.

The chief minister, who presented the budget in the Legislative Assembly at Vidhana Soudha, appears to have tried to tap all revenue sources to fill his kitty. He, at the same time, has tried to gratify the poor and the middle class by  lowering taxes on a dozen items (see the list) like ragi/jowar rotti and helmets.

But the revenue forgo due to the reduction in tax is marginal compared to what he has planned to raise through tax hikes. The budget has, however, brought cheers to Bengalureans and people living in other major cities of the State. As much as Rs 4,222 crore has been allocated for infrastructure development in the State capital.

A total of Rs 14,853 crore has been earmarked for urban development, which is 1% more than the current year's allocation. He has desisted from announcing any more populist schemes such as Anna Bhagya and Krishi Bhagya.

Though the State economy is in the doldrums with Gross State Domestic Product nosediving to 6.2% in 2015-16 from 7.8% the previous year, Siddaramaiah has continued to dole out sops to the Ahinda (Kannada acronym for minorities, BCs and dalits) cause.

The budget has paid only lip service to the drought-hit farming community, and is silent on farmers’ suicides and ways to bail them out of the distress situation. The only big announcement for the farming community is the abolition of agri-income tax. The IT on agriculture used to fetch a meagre Rs 20 crore.

Total outlay of the revenue-surplus budget is Rs 1,63,419 crore, which includes Rs 26,341 crore capital expenditure. The budget complies with all fiscal parameters by maintaining revenue surplus of Rs 522.01 crore.

The total revenue shortfall in the current year is expected to be Rs 1,370 crore, mainly on account of declining fuel prices and slump in realty sector. The government has proposed to borrow Rs 31,036 crore in the coming year.