Petrol, diesel to get costlier as Karnataka hikes sales tax on fuel

Bengaluru: The Karnataka government on Saturday hiked sales tax on fuel, which will make petrol and diesel dearer, as Chief Minister Siddaramaiah looks to mobilise resources.

According to government sources, a litre of petrol will go up by Rs 3 and diesel by Rs 3.5.

The government expects this to generate Rs 2,500-2,800 crore during the financial year.

In a notification issued by the Finance Department, the government has hiked sales tax on petrol by 3.92 percentage points. On diesel, the hike is 4.1 percentage points.

The resource mobilisation measure comes after the Lok Sabha poll results, in which the ruling Congress was left disappointed after winning nine out of the 28 seats in the state.

Also, this was done just days after Siddaramaiah, who is also the finance minister, reviewed the state’s revenue generation and fiscal position.

This year, Siddaramaiah has set aside a staggering Rs 52,009 crore for the Congress’ flagship ‘guarantee’ schemes. Last year, his government spent Rs 37,325 crore on the schemes.

There are concerns in the government over resource mobilisation to meet the financial needs exacerbated by the ‘guarantee’ schemes. Between March 14 and June 4 this year, the Congress government lost nearly three months due to the Lok Sabha election model code of conduct, which slowed down revenue collections in the first quarter of the fiscal.

Earlier this week, while reviewing finances, Siddaramaiah asked officials to work harder towards meeting revenue collection targets.