Karnataka budget announces Rs.34,000 crore farm loan waiver, increase in taxes on fuel
Chief Minister H.D. Kumaraswamy proposes ‘Compete with China’ scheme.
Bangalore – Karnataka Chief Minister H.D. Kumaraswamy on Thursday presented the Congress-JD(S) coalition government’s maiden budget, announcing farm loan waiver worth ₹34,000 crore.
The budget, however, has increased the rate of tax on petrol from the present 30% to 32%, hiking petrol prices by ₹1.14 a litre and the rate of tax on diesel from the present 19% to 21%, hiking its price by ₹1.12 a litre.
In the run-up to the recent Assembly polls, the Kumaraswamy-led JD(S) had promised to waive farm loans borrowed both from cooperative and nationalised banks within 24 hours of coming to power.
Here are the live updates:
“Farmer and Rural Economy-oriented Budget”
Bangalore Chamber of Industry and Commerce (BCIC) termed the Karnataka State Budget as a “Farmer and Rural Economy-oriented Budget” as the new Congress-Janata Dal (Secular) coalition Government proposed waiver off crop loans upto ₹2 lakh and allocated ₹150 crore for adopting Israel-model for crop development in the State.
Farmers hail announcement on zero budget natural farming
Karnataka Natural Farmers Association has welcomed the budget announcement to support zero budget natural farming (ZBNF). The association president Ishwarappa Chakote and member Chandrashekar Kadadi told The Hindu that this would be a long-term welfare measure for farmers.
“I have been practicing ZBNF for 20 years now. My cost of cultivation has reduced significantly while the returns have improved steadily. It can be practiced in all agro-climatic zones,” Mr. Kadadi said.
Coastal region MLAs protest
Soon after budget presentation, MLAs from the coastal districts raised objections saying their region has been paid no attention. One MLA held up a placard expressing displeasure over this.
The budget announces that three public industries that have making profits for many years now will issue IPOs and go public this year. However, the budget doesn’t name these 3 public industries.
Factory for old phones
To separate component of old mobile phones, the State has proposed to establish an industry for mobile phone components will be established in Chikkaballapur. The State sees an opportunity to separate component of 3 crore old phones.
The State government has proposed to establish ICB chip manufacturing unit in Mysuru.
Fiscal deficit and liabilities increase
Compared to the budget presented by former CM Siddaramaiah in March 2018, the budget presented by H.D. Kumaraswamy has increased fiscal deficit and also liabilities of the State. The gross borrowings in the earlier budget was ₹39,328 crore while the gross borrowings has increased to ₹47,134 crore in the budget presented on Thursday. The fiscal deficit is pegged at ₹40,753 crore i.e. 2.89% of the GSDP, up from 2.49% in Siddaramaiah’s budget. Total liabilities of the State has increased from ₹2.86 lakh crore to ₹2.92 lakh crore, which is 20.75% of the GSDP.
However, both fiscal deficit and liabilities of the State are well within the parameters set by the Karnataka State Fiscal responisibility Act.
Manufacture cluster in Koppal district to challenge Chinese toys
To compete with the Chinese, the government has proposed to establish a cluster of toy-making units in Koppal district. The budget states that toys operated with battery and electricity have entered the market and ICB, chip, micro DC motor are incorporated in them.
“There is a world market for such toys. In China, these mechanised toys are manufactured and supplied to the entire world. In this background, a challenge to Chinese toys, it is proposed to establish a cluster for manufacture of toys in Koppal district.”