Amid political turmoil, HDK to woo farmers in Budget

The second Budget of the coalition government, to be presented by Chief Minister H D Kumaraswamy on Friday, has been overshadowed by the fluid political situation in the state.

All eyes will be on Kumaraswamy, who also holds the finance portfolio, on how he will sustain what is touted as the biggest crop loan waiver in the history of Karnataka without derailing the economy.

Kumaraswamy had announced that the Rs 43,000-cr farm loan waiver scheme will be implemented in one stroke with allocation in the 2019-20 Budget instead of completing the process in four stages as earlier planned.

He made the declaration following attacks by the BJP, including Prime Minister Narendra Modi, who mocked at the scheme stating it only offered a “lollipop” for only a handful of farmers.

But what is worrying for the common man is that Kumaraswamy, who will present the Budget at 12.30 pm in the Legislative Assembly, may pass on the burden of the crop loan waiver, or at least a part of it, to citizens in the form of Additional Resource Mobilisation (ARM) measures.

In January, the state government hiked fuel prices by increasing the rate of sales tax on petrol and diesel to 32% and 21% respectively. The government cited loss of revenue due to a fall in crude oil prices in the international market. It is unlikely that the chief minister will antagonise the common man by jacking up the rates once again.

Kumaraswamy cannot tinker with the Goods and Services Tax slabs as they are fixed by the GST Council. He may increase excise duties on liquor and beer, hike motor vehicles tax and impose some cesses.

Kumaraswamy may also go in for huge market borrowing to fund infrastructure projects, especially in Bengaluru, for he has a formidable task of keeping voters happy with the Lok Sabha elections just three months away.

Kumaraswamy also has a formidable task of earmarking grants for various “bhagya” schemes announced by the previous Congress government headed by Siddaramaiah.

In July last year, in his first Budget, Kumaraswamy estimated that total receipts for the fiscal 2018-19 will be Rs 2.13 lakh crore. The revenue generation from resource generating departments including commercial taxes, transport, stamps and registration and excise have been good and the target is likely to be met.