Karnataka Chief Minister H.D. Kumaraswamy honoured his party’s election promise by announcing waiver of ₹34,000 crore in crop loans in the coalition government’s first budget presented on Thursday.
To fund the waiver, people would need to pay more for petrol, diesel, electricity, liquor and motor vehicles.
Largely focussing on the needs of the constituencies in the Cauvery region where the Janata Dal (Secular) won the highest number of seats, the Chief Minister maintained that all budgetary proposals, presented by Mr. Siddaramaiah on February 16, 2018, would be implemented, and he had only added new schemes and proposals.
Capped at ₹2 lakh
The size of the budget is ₹9,307 crore more than the one presented by Mr. Siddaramaiah. The coalition government’s budget size was ₹2,18,488 crore against Mr. Siddaramaiah’s budget of ₹2,09,181 crore. The budget capped the crop loan waiver at ₹2 lakh. In the first stage, defaulted crop loans up to December 31, 2017, would be written off. Farmers who repaid the loan within the time frame would be encouraged by the government by crediting them the repaid loan amount or ₹25,000, whichever is less.
To garner resources to waive loans from co-operative and natinalised banks, the budget increases tax on petrol from the present 30% to 32% and diesel from 19% to 21%. Hence, petrol price will be increased by ₹1.14 a litre and diesel by ₹1.12 a litre. Tax on liquor has been increased by 4% and consumption electricity by 3%, from 6% to 9%.
The Chief Minister defended this, saying fuel prices are less in the State compared to the neighbouring States in south India. He said he had managed to pull off loan waiver while staying within the parameters of the Karnataka Fiscal Responsibility Act.
Districts of Hassan, Mandya, Ramangaram, Mysuru, Chikkaballpur, Tumakuru have received big bonanza in the budget. While there are not many new projects for Bengaluru, the budget earmarks ₹1000 crore for the first phase of a mega project to build a network of elevated corridors in the city, totalling to 95 kms linking opposite ends of the city.
To compete with Chinese toys/products, the budget proposed incentives to domestic manufactures, on the lines of Make in India. A new scheme - Kayaka - was announced to enhance skill development and entrepreneurship quality in SHGs. Under this interest free loans up to ₹ 5 lakh and 4% interest loan between ₹ 5 to ₹ 10 lakh will be fixed. A sum of ₹ 5 crore set aside to support 3,000 SHGs.
Some of the major institutions/initiatives included in budget include an open university to sports and body building in Tumakuru, Homeland Security University in Shivamogga, Tourism University at Hampi, film university in Ramaganaram, medical college at Kanakapura in Ramangaram, international science centre at Chikballapur, ₹ Rs 50 crore package for development of Mandya city.
The budget with a revenue surplus estimated at ₹106 crore, however, has no mention of a plan or details on the vision of the coalition government that hopes to rule the state for the five-year term.
