Sales tax hiked on 19 commodities

By S.K. Ramoo

BANGALORE, MARCH 6. The budget estimates for 2001-2002 presented on Monday in the Legislative Assembly by the Chief Minister, Mr. S.M. Krishna, who holds the Finance portfolio, appear to be ``harsh'' and ``ambitious'' compared to last year's ``soft'' budget. He declared that Karnataka was not facing a financial crisis, but its financial position was cause for concern.

The Chief Minister sought a vote-on-account for four months ending July 31. The overall expected deficit is Rs. 286.05 crores less by Rs. 43. 74 crores. The Government was expected to raise Rs. 1,200 crores from small savings, Rs. 738 crores from market borrowings, Rs. 437.65 crores from negotiated loans and Rs. 2,106.69 crores as total loan from the Union Government. The revised estimates of total receipts are Rs. 19,494.76 crores, compared to the Rs. 19,664.76 crores for 2000- 2001. The total expenditure is expected to be Rs. 19,739.64 crores as per the revised estimates as against the Rs. 20,061.06 crores for 2000- 2001.

The total receipts, including those from additional resource mobilisation measures, are pegged at Rs. 23,232.81 crores, comprising revenue receipts of Rs. 17,328.10 crores and capital receipts of Rs. 5904.71 crores. The total expenditure is estimated to be Rs. 23,276.55 crores, of which the revenue expenditure will be Rs. 19,952.19 crores and capital expenditure Rs. 3,324.36 crores. Sales tax has been increased on 19 commodities, including audio and video cassettes, magnetic tapes, cakes and biscuits, electrical goods, motor vehicle parts, paints, suitcases, mosaic tiles and chips, dry fruits, coconut oil and instant coffee.

New sales tax

New sales tax has been imposed on computer software, including programming, books, second sale of aerated water, aluminium domestic utensils, kerosene stoves and products of cane and bamboo, excluding furniture.

The entertainment tax on cable operators has been hiked. Seven groups of persons have been brought under the net of professional tax. A new rate of sales tax has been imposed on lottery draws. Tax on textiles, beedis and packing materials has also been raised. Mr. Krishna announced that he had enhanced the annual plan outlay from Rs. 7,274 crores in 2000-2001 to Rs. 8,588 crores in 2001-2002, an increase of 18 per cent. A new industrial policy would be announced in two months, and an Industrial Infrastructure Development Fund with an initial corpus of Rs. 6 crores would be formed. He also announced the creation of a Technological Upgradation and Modernisation Fund with an initial corpus of Rs. 10 crores. He had provided Rs. 100 crores for Voluntary Retirement Scheme (VRS) as 10 unviable public sector enterprises would be closed or privatised by March 2002.

The fiscal deficit in the revised estimates for 2000- 2001 is Rs. 4,148 crores, and the Chief Minister said he was committed to bring the revenue deficit to zero by 2004-2005 and intended to stabilise the fiscal deficit by three per cent during the same period. To achieve this, a Medium-Term Fiscal Plan was prepared.

Referring to the power sector, he said transmission and distribution losses would be brought down by nine per cent during the next four years. The Revolving Market Intervention Fund would be enhanced from Rs. 100 crores to Rs. 200 crores, and ultimately to Rs. 400 crores over a period of time. He made a plea to the cooperative institutions giving short-term crop loans to reduce the lending rate by two per cent during 2001-2002. The Karnataka Agricultural Produce Marketing Act would be amended in the current session for payment of market fee only once, by treating the entire State as a single market for a particular commodity. The State Agricultural Prices Commission would start functioning in 60 days.

Democratic cooperatives

The Karnataka Cooperative Societies Act is to be amended to render cooperatives autonomous and democratic. The Karnataka State Consumer Cooperative Federation would be merged with the Karnataka State Cooperative Marketing Federation.

The CM said the Karnataka Panchayat Raj Act would be amended for removing the ceiling on ratable value to enable gram panchayats to raise adequate revenue from property tax. A Karnataka SC/ST Commission would be set up on the lines of the National SC/ST Commission for the implementation of social welfare programmes.

The State Government entered into an MoU with the Railways, following which the Rail Infrastructure Company (K- RIDE) was established. The Government would provide Rs. 15 crores as its equity contribution to the company. The Government is earmarking Rs. 25 crores for the proposed international airport at Bangalore, which would be taken up as a joint venture.

The Chief Minister said Bangalore, mega city, required huge investment, which the Bangalore Mahanagara Palike (BMP) was unable to provide. Hence, the Government was setting up a Capital Development Fund, with an initial contribution of Rs. 50 crores for augmenting the BMP's resources. The civic body would enter into an MoU by April 15 with the Government for improving its financial and operational efficiency.

Under the Legislators' Area Development Fund, the Government would be providing Rs. 75 crores during 2001-2002. Under it, Rs. 25 lakhs would be provided for each legislator.

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