Short of funds from Centre, Karnataka hikes taxes on petrol, diesel, liquor
Yediyurappa’s budget will make petrol costlier in the state by Rs 1.60 per litre and diesel by Rs 1.59 per litre
Bengaluru: Karnataka chief minister B S Yediyurappa, who holds the finance portfolio, presented the state’s budget for the year 2020-21 with a total outlay of Rs 2,38,893 crore, proposing higher taxes on petrol, diesel, liquor and transport carrier vehicles.
Yediyurappa, who was presenting his seventh budget in the Assembly, gave thrust to agriculture and the social sector in his presentation.
The chief minister said the fiscal deficit was expected to be Rs 46,072 crore, or 2.55 percent of the GSDP.
Total liabilities of the state amounted to Rs.3,68,692 crore for 2020-2021, which was well within the limit of 25 percent of GSDP, as mandated by the Karnataka Fiscal Responsibility Act.
Admitting that there has been a Rs. 11,215 crore reduction in the state’s share of taxes from the central pool in 2020-2021, the chief minister decided to mobilize additional resources by imposing a 3 per cent tax on petrol and diesel. This will make petrol costlier in the state by Rs. 1.60 per litre and diesel by Rs. 1.59 per litre.
The chief minister also proposed a 6 per cent tax hike on Indian Made Liquor (IML), setting a revenue target of Rs. 22,700 crore in 2020-2021 as against Rs. 19,701 crore in 2019-2020.
As he promised in the runup to the budget, Yediyurappa’s budget emphasized the agriculture and allied sector by earmarking Rs 32,259 crore for 2020-2021.
For the welfare sector, he indicated a spending of Rs 72,092 crore on schemes for the SC/STs, backward communities, women and children, minorities, senior citizens and labourers. For industry, energy and infrastructure sector he allocated Rs 55,732 crore; for comprehensive development of Bengaluru Rs 8,772 crore; for conservation of culture, heritage and natural resources Rs 4,552 crore; and for administrative reforms and public service delivery sector Rs 10,194 crore.
The chief minister reduced stamp duty on first-time registration of new apartments and flats costing less than Rs 20 lakh from the existing 5 per cent to 2 per cent.