The Hindu Business Line : Pro-farmer Budget for Karnataka

Farmers, weavers and fishermen can now get loans from co-operative societies at 3 per cent interest rate. Retirement age of all government employees has been raised by two years to 60 years.

– V. Sreenivasa Murthy

The Chief Minister, Mr B.S. Yeddyurappa, presenting Budget at Vidhana Soudha in Bangalore on Thursday.

Our Bureau

Bangalore, July 17

The BJP Government in Karnataka today presented a surplus Budget containing a slew of subsidies, including free power for the farm sector in line with its pre-election promise.

The Chief Minister, Mr B.S. Yeddyurappa, who holds the Finance portfolio, while presenting the revised 2008-09 Budget in the Assembly, said the revenue surplus for 2007-08 as per revised estimate is Rs 2,981.49 crore or 1.38 per cent of the GSDP.

The fiscal deficit for the same year is Rs 6085.48 crore, which is 2.83 per cent of the GSDP. The revenue surplus and fiscal deficit for Budget estimate 2008-09 is Rs 1,527.45 crore and Rs 7029.73 crore, which are 0.63 per cent and 2.88 per cent of the GSDP respectively.

The government also announced that it intended to increase life time tax on passenger cars by 2 per cent while reducing value added tax on used cars to 4 per cent. It has also raised the retirement age of all government employees by two years to 60 years.

Cut in stamp duty

The stamp duty on demerger or reconstruction of companies or amalgamation has been reduced to 5 per cent from 7.5 per cent.

It has also reduced the stamp duty on all types of loan up to a maximum of Rs 5 lakh to 0.25 per cent from 0.5 per cent. It has also made it mandatory for all banking companies to pay profession tax.

The government announced that poor students who avail themselves of loans for professional courses by clearing common entrance tests will get loans at 6 per cent interest rate.

The government has also decided to abolish value added tax on imported textiles and entry tax on readymade garments.

It is also proposed to partially reimburse the tax on aviation turbine fuel to extend air network to smaller cities. It also proposes to have a new textile as well as a new industrial policy soon.

resource mobilisation

The State expects to mop up Rs 120 crore as additional resource mobilisation from several tax measures. The Budget is based on a growth estimate of 12.7 per cent of the GSDP.

The size of the State Plan in this budget is Rs 25,953 crore representing over 10 per cent of the GSDP. This outlay is 46 per cent more than the revised estimates of the plan expenditure during 2007-08.

Mr Yeddiyurappa, who presented his third Budget, said farmers, weavers and fishermen can now get loans from co-operative societies at 3 per cent interest rate. He said the budgetary allocation for growth of agriculture has been increased 64 per cent to Rs 1,974 crore from the previous year.

The government will also provide free electricity for irrigation pumpsets which will benefit about 15 lakh farmers. The state will invest about Rs 2050 crore for electricity subsidy for irrigation pumps.

The government will also add about 1000 MW of power during the current fiscal year. The electricity distribution companies have also been roped in to provide free meters to measure the actual utilisation of electricity by farmers.

The government has also decided to give more funds for the development of Bangalore. It will also set up an agency which will raise resources through sale or lease of government land. It expects to mobilise Rs 3,000 crore through sale of land around Bangalore.

infrastructure development

About Rs 1,800 crore has been provided for infrastructure development of the city and Rs 700 crore for the Bangalore metro while a high speed rail connecting the new Bangalore airport will also be set up soon.

The State will also plans to allow setting up of 1000 more liquor shops and 500 additional bars and restaurants during the current year.

The Chief Minister said that the State’s debt stock which amounted to Rs 60,588 crore is within 30 per cent of the GSDP by 2007-08. The total debt servicing liability including interest payments during 2007-08 was Rs 6018 crore amounting to 14.73 per cent of the state revenue receipts.

The government expects to raise Rs 31,875.85 crore in tax revenue and Rs 1,931.65 crore in non-tax revenue. It also plans to raise Rs 1,571.29 crore as loans from central government and Rs 5,248.42 crore from the RBI and other financial institutions.

The revised estimates of total receipts are Rs 47,649.42 crore as compared with the budget receipt of Rs 47,927.28 crore for 2007-08. The total expenditure is expected to be Rs 47,822.98 crore according to the revised estimate compared with the budget estimate of Rs 47,950.34 crore for 2007-08.

The total receipts as per budget estimates for 2008-09 are expected to be Rs 55,273.94 crore comprising revenue receipts of Rs 47,240.31 crore and capital receipts of Rs 8033.63 crore.

The total expenditure is likely to be Rs 55,313.41 crore of which the revenue expenditure is estimated at Rs 45,712.86 crore and capital expenditure is estimated at Rs 9,600.55 crore.