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Bengaluru, Mar 13 (IANS): The Karnataka budget for the 2015-16 fiscal proposes 6-20 percent hike in additional excise duty on Indian-made liquor (IML), three percent more value added tax (VAT) on tobacco products and one percent hike in tax rate on diesel and petrol.

Presenting the budget in the state legislative assembly on Friday, Chief Minister Siddaramaiah, who holds the finance portfolio, told lawmakers that he was increasing additional excise duty on IML by six to 20 percent to achieve a target of Rs 15,200 crore by March 2016.

The target for FY 2016 from excise duty is Rs.800 crore more than Rs 14,400 crore set for this fiscal (2014-15).

Similarly, VAT on cigarettes, cigars, gutkha and other manufactured tobacco products has been enhanced to 20 percent from 17 percent.

"The objective of increasing VAT on tobacco products is to discourage their use and prevent illegal trade diversion," Siddaramaiah said in his 90-minute-long budget presentation.

The chief minister also decided to increase tax rate on diesel and petrol by one percent to mobilise additional resources for funding the state government's various social schemes.

"I propose to increase the tax rate on diesel and petrol by a modest one percent keeping in view the need to raise additional resources," said Siddaramaiah and justified the hike on the ground that the central government had raised excise duty on both the petroleum products on four occasions during the current fiscal.

"There has been a steady fall in crude oil prices during the last six months in the international market and their benefits have been passed on to consumers. This had significant impact on the state's revenue collection as tax is levied ad-valorem. But the state refrained from interfering with the tax rates on both the fuels though other states increased rates to safeguard their tax revenues," Sidddaramaiah pointed out.

The budget, however, proposes to rationalise and revise rates of stamp duty and registration fee on movable and immovable properties to provide relief to the people.

Solar panels, footwear, stoves to cost less

Mobile phone chargers, footwear, wick stoves, mats, industrial cables and solar panels will become cheaper in Karnataka from April onwards.

The relief to consumers and industrial users came as the state budget for the ensuing fiscal (2015-16) on Friday proposed to reduce or exempt value added tax (VAT) on them.

"I propose to exempt footwear costing up to Rs.500 per pair and hand-made products like floor mats, table mats, runners and utility bags made of banana fibre from value added tax (VAT) and reduce it (VAT) on mobile phone chargers and wick stoves to 5.5 percent from 14.5 percent," Chief Minister Siddaramaiah said here while presenting the budget.

The reduction on wick stoves will benefit the poorer sections of society which use kerosene as fuel.

To promote solar energy generation in the state, the chief minister has proposed to exempt certain solar photo voltaic panels and solar inverters from VAT.

Paddy, rice, wheat, pulses and their products will continue to be exempted in the new fiscal.

In a relief to small traders, the registration limit has been increased to Rs.10 lakh from Rs.7.5 lakh.

VAT on manufactured sand and its machinery or equipment will be reduced to 5.5 percent to encourage setting up of units as a viable alternative to mining sand from the riverbed.

"VAT on industrial cables such as high voltage cables, jelly filled cables, optical fibre cables, XLPE (cross-linked polyethylene) insulated cables and PVC (Polyvinyl Chloride) insulated cables will be reduced to 5.5 percent, conceding the long pending request from the electrical industry," he said during his 90-minute budget presentation.

The chief minister, who spoke in Kannada, also proposed to reduce the age criteria for senior citizens to 60 years from 65 years to extend exemption benefits on paying profession tax. He also extended the exemption benefits to employees drawing a salary of Rs 15,000 as against the present limit of Rs 10,000 per month.

The replanting allowance has been increased to Rs 2,050 from Rs 900 per tonne coffee produced in view of the escalation in replantation expenditure incurred by coffee planters.

Earlier Updates

Budget: Rs 2 cr for Konkani chair; Shiradi Ghat ready in 18 months

Daijiworld Media Network - Bengaluru

Bengaluru, Mar 13: Chief minister Siddaramaiah on Friday March 13 presented the state budget for the fiscal year 2015-2016. This was his 10th budget.

At the outset, Siddaramaiah said that his government is committed to inclusive growth of all communities, especially the backward and Dalit classes, and is also committed to maintaining communal harmony in the state. "We are also committed to protect the interests of Kannada and Kannadigas," he added.

He also stressed that women's safety is a top priority for his government.

Siddaramaiah said the total expenditure of the state stands at 65,094 crore.

Iodised salt would be made available at Rs 2 per kg for BPL card holders.

The CM also announced Rs 2 crore to set up Konkani study chair in Mangalore University. Also, a study chair on Dr U R Ananthamurthy will be set up in Mysore University.

The CM announced that the ongoing work on Shiradi Ghat would be complete in 18 months. The transport department has been allotted funds of Rs 1,208 crore.

A central command centre will be set up for countering terrorism.

Siddaramaiah announced that Rs 120.60 crore would be allotted to coastal cyclone relief project.

As per the recommendations of Nanjayya Math report, 439 new gram panchayats will be formed in the state.

Gadag will get a rural development university. Also, Rs 9,728 crore will be set aside for the rural development department.

Information Technology (IT) departent will get funds of Rs 202 crore. All government hospitals in the state will have ICUs, and laboratories will be set up at five places for controlling communicable diseases.

Ten new women police stations will be established in the state, and Rs 9 crore will be allotted for healthcare of police personnel.

Rs 3 crore will be allotted for building memorials of Dalit leaders.

Hundred students of backward classes will be given Rs 10 lac to pursue higher studies in foreign countries.

He also announced that employees drawing up to Rs 15,000 will be exempted from professional tax.

VAT on cigarette and bidi has been increased between 17 to 24 percent and tax on petrol and diesel has been hiked by 1 percent.

Apart from cigarettes, bidis and betel, liquor will also be costlier, and so also petrol, diesel and property registration.

Mobile phone chargers, footwear, industrial cables, solar panels and solar inverter are among the items that will be cheaper.

He also announced that Ayush hospital will be set up in Mangaluru and other places.

He said that 1,886 kilometers of state highways will be improved in the next 3 years. Also, alternative roads will be developed to Kempegowda international airport in Bengaluru.

He announced that the excise department would allow farmers to produce toddy.

He said that the state's GSDP has grown from 5 % to 7 % in 2014-15, and that agriculture growth will increase from 4 % to 5 % this year.

He said that funds from the union government for central schemes have been less, as a result of which, the state incurred estimated losses of Rs 1,987 crore from central schemes.

Karnataka's contribution to national export has gone up from 33% to 35%, he said.

Rs 110 crore has been allotted for Yashaswini scheme, Rs 75 crore for horticulture department and Rs 10,000 crore has been set aside for short-term loans for farmers.

The state has recorded 16% growth in milk production. The state will set up separate milk federation in Chamrajnagar and milk-shed area in Bidar, Siddu said.

Siddaramaiah announced interest-free loans up to Rs 2 lac for self-help groups and Chetana scheme to rehabilitate sex workers.

Rs 1000 crore will be allotted under CM's city improvement scheme.

In order to improve security, CCTVs will be installed across Bengaluru at a cost of Rs 8 crore. Free-WiFi will be extended to entire Bengaluru in a phased manner. 

Bengaluru will also get 25 skywalks under PPP model, Rs 80 crore for underpass and flyovers at Hebbal junction, Rs 44 crore to build flyovers at Doddanakundi, and Rs 270 crore for waste management. BBMP, BWSSB, BMRCL get total allocation of Rs 4, 770 crore.

As many as 117 lakes in Bengaluru will be transferred to BDA for revival.

Effective age of senior citizens will be reduced to 60 from 65 years.

APL card holders will get 3 kg of rice at Rs 15 and 2 kg of wheat at Rs 10 every month.

Henceforth, orders issued by assistant commissioners and deputy commissioners will be made available online. Altogether, 15 DC offices, 25 sub-divisional offices and 25 tahsildar officers will be made paperless.

Six temples including Kollur, Kukke Subramanya and Chamundibetta (Mysuru) are brought under mega temple development project.

Allocations for departments/schemes:

Minorities development: Rs 1,000 crore
SC/ST welfare project: Rs 16,356 crore
Health and family welfare: Rs 6,107 crore
Irrigation: 12,956 crore
Information department: Rs 93 crore
Law and justice: Rs 597 crore
Horticulture: Rs 768 crore
Commerce: Rs 1,111 crore
Basic amenities development: Rs 764 crore
IT/BT: Rs 202 crore
E-governance: Rs 51 crore
Urban development: Rs 11,465 crore
Rural development: Rs 9,829 crore
Revenue department: Rs 4,827 crore
Fuel supplies department: Rs 12,828 crore
Sports department: Rs 147 crore
Social welfare department: Rs 4,584 crore
Primary and secondary education: Rs 16,204 crore
Higher education: Rs 3,896 crore
Labour and employment: Rs 852 crore
Kannada and culture: Rs 332 crore
Fisheries: Rs 297 crore
Forest and ecology: Rs 1,757 crore
Transport: Rs 1,208 crore
Women and child welfare: Rs 4,232 crore
Animal husbandry: Rs 1,882 crore
Housing: Rs 3,819 crore
Cooperation department: Rs 1,323 crore
Sericulture: Rs 186 crore