Beer to cost more as Siddaramaiah raises additional excise duty

The Karnataka budget for the ensuing financial year, with elections to the Lok Sabha expected shortly, bears a striking resemblance to that of the last year when the elections to the State Legislative Assembly were on the cards. With an eye on the Lok Sabha elections, Chief Minister Siddaramaiah who also holds the Finance portfolio, has sought to please all sections of society, while marginally raising excise duty on liquor, particularly that of beer (122 per cent to 135 per cent), and licence fee for liquor shops. The Chief Minister has worked out several novel ways of additional resource mobilisation, including a reduction in the value added tax on liquor (to 5.5 per cent) sold by bars and restaurants operating in urban areas and clubs, lodging houses and star hotels. The total estimated expenditure as envisaged by the Chief Minister in the State Budget presented to the Legislative Assembly on Friday marks a further increase to the revised budget presented by him in July last — from Rs. 1.21 lakh crore to Rs. 1.38 lakh crore, the highlight being added sops to farmers.

This is a record ninth budget being presented by Mr. Siddaramaiah, the second after he took charge as Chief Minister. Like his predecessors in the previous governments of the Bharatiya Janata Party, Mr. Siddaramaiah has paid great attention to the welfare of the rural people and in particular, the agriculture sector. The ceiling for interest free agricultural loans has been raised to Rs. 3 lakh from the earlier Rs. 2 lakh. Farm loans between Rs. 3 lakh and Rs. 10 lakh will be provided at an interest rate of 3 per cent. This apart, several schemes and incentives have been announced for the benefit of farmers, the nomadic tribes, the Scheduled Castes and the Scheduled Tribes and the backward classes. The steps to encourage information technology companies in tier 2 and tier 3 cities by reimbursing provident fund and ESI payments up to Rs. 2,000 per employee per month, and a special allocation of Rs. 1,527 crore for the overall development of Bangalore are also new.

An interesting feature is that all the proposed tax measures and the reliefs provided in the financial document will be effective on March 1 unlike in the past when it would become effective on April 1 of the new financial year. It will, therefore, be imperative for the government to table all money bills at the earliest and obtain the approval of the legislature. Sources in the State Secretariat told The Hindu that this has been done to mop up additional resources.

The budget estimates for 2014-15 indicated that the total receipts will be Rs. 1,36,249 crore — comprising revenue receipts of Rs. 1,11,039 crore and capital receipts of Rs. 25,210 crore which includes borrowings of Rs. 25,042 crore.

The revenue surplus is estimated at Rs. 281 crore. It should be noted that the Karnataka budget outlay crossed the Rs. 1-lakh crore mark for the first time in 2012 when D.V. Sadananda Gowda was the Chief Minister. Mr. Siddaramaiah has sought a Vote on Account for the first four months of the financial year, ending July 31. This has been the norm in Karnataka for nearly a decade.

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