‘It can neither help economic growth nor revive sagging economy'
Chief Minister D.V. Sadananda Gowda, in his reaction to the Union Budget presented in the Lok Sabha on Friday by Finance Minister Pranab Mukherjee, said: “It is a status squo budget. It can neither help economic growth nor revive the already sagging national economy.”
He said Mr. Mukherjee has “disappointed us with no serious measures to control inflation. The people of the country have been suffering due to the high inflationary trend in the last two years and food inflation has ranged between 18 to 22 per cent.”
The hike in Central Excise and service tax by 2 per cent (from 10 to 12 per cent) will trigger higher inflation as the rates of goods and services will go up automatically, further burdening the middle class and the poor.
What has dropped
With reference to Karnataka, Mr. Sadananda Gowda said, “There are more negative implications than positive implications in this budget. The States' share of taxes and duties, which was nearly Rs. 2.63 lakh crore in the budget estimates for 2011-12 has been brought down to Rs. 2.55 lakh crore in the revised estimates for 2011-12. Non-plan grants and Central Assistance has also been brought down which means Karnataka will get less than expected.”
The State had requested to raise the duty on imported silk yarn to protect the local sericulturists from the cheap imported yarn. “We had also requested for a package to safeguard the welfare of our sericulturists,” he said. However, these requests were not considered in the budget.
He said the State's long-pending demand for allotment of gas for gas-based projects has also not been considered. Karnataka does not figure in the package announced for weavers and artisans.
However, he welcomed the decision of providing Rs. 50 crore for the research activities of University of Agricultural Sciences, Dharwad. The move to have Viability Gap Funding extended to many other project types under PPP is also a welcome step, he added.
Mr. Sadananda Gowda said it was expected that the Finance Minister would initiate steps to curb the growing prices of fuel and other petroleum products, but no such attempt was made. The decision to reduce subsidy would negatively impact farmers and the poor people. However, the decision to deposit the subsidy amount directly into the beneficiaries bank accounts is a welcome step, he said.