Karnataka Chief Minister HD Kumaraswamy presented his government’s first budget. He announced a farm loan waiver of Rs34,000 crore. The Loans of up to Rs2 lakh for each farmer will be waived. Farmers who repaid the loan within time will be credited the repaid loan amount or Rs25000 whichever is less. Apart from the loan waiver announced by Kumaraswamy, Rs 4,000 crore has been allocated in the budget to complete the Rs 8,165 crore waiver of farm loans from cooperative banks.
Here are some important highlights from the Budget:
1. Loan Waiver to Make Liquor Costlier:
The ambitious project of the government to waive farm loans has made the liquor in the state costlier. Taxes on the Indian Made Liquor (IML) has been increased by 4% on all 18 slabs (different kinds of alcohols). The excise department’s target for the year 2018-19 has been increased to Rs 19,750 crore from Rs 18,750 crore.
2. Pay More For Fuel and Electricity:
Taxes on fuel and electricity have been increased to accommodate the need for additional revenue. It has been proposed to increase the rate of tax on petrol from the present 30% to 32% and diesel from 19% to 21%
3. Despite Loan Waiver, HDK Presents a Surplus Budget:
A complete farm loan waiver was opposed by many, including former chief minister Siddaramaiah, claiming it would put pressure on the state’s economy. But Kumaraswamy presented a surplus budget, with a revenue surplus estimated at Rs 106 crore.
The fiscal deficit of the state (2.89%), also remains within 3% of the GSDP and total liabilities of the state, estimated to be 20.75%, is less than 25% of GSDP as mandated by Karnataka Fiscal Responsibility Act.
Source- The Quint