Karnataka budget

No new taxes in Karnataka budget

Bangalore/New Delhi, March 10 (IANS) A Rs.61 billion increase in the total outlay with higher spend on infrastructure, rural development, irrigation, education, weaker sections of society, housing and women and children welfare and no new taxes mark the 2008-09 budget for poll-bound Karnataka presented Monday.

The state capital and India's IT hub Bangalore gets Rs.2.4 billion (Rs.240 crores) to improve road maintenance. Major district roads will also be improved with an expenditure of Rs.3 billion (Rs.300 crores), Union Finance Minister P. Chidambaram said, presenting the budget to parliament in New Delhi.

The budget was presented in parliament as Karnataka is under president's rule since Nov 20 following the fall of the one-week-old Bharatiya Janata Party (BJP) ministry after its coalition partner Janata Dal-Secular (JD-S) withdrew support.

The Congress party in Karnataka hailed the budget. Its state chief Mallikharjun Kharge said it addressed the needs of both rural and urban areas. BJP's B.S. Yeddyurappa, who was chief minister for one week in November last year, described the budget as an "election gimmick".
Chidambaram allocated Rs.50 million as Karnataka's initial equity in the new Special Purpose Vehicle to be set up to provide high speed rail link to the new Bangalore International Airport scheduled to start commercial operations from March 30.

The new airport is at Devanahalli, about 35 km from the city centre and connectivity to it remains a problem.

The budget continues all the popular programmes of the previous JD-S-BJP coalition government in the state. They include loans to farmers at four percent interest rate, mid-day meal scheme for schoolchildren and free bicycles for school-going girls to encourage women's education.

The budget allocates Rs.1 billion for upgrading airports in Mangalore, Mysore, Hubli, Bijapur, Shimoga, Hassan, Gulbarga, Karwar, Bidar and Belgaum.

An amount of Rs.500 million is earmarked for a new state secretariat building, Vidhana Soudha, in Belgaum bordering Maharashtra.

Chidambaram also increased by a whopping 58 percent allocation to redress regional imbalances within the state. Called the Special Development Plan, to mainly help north Karnataka which lags behind the south of the state, it was launched in 2007-08 with an allocation of Rs.15.71 billion. In 2008-09, the allocation for the plan will be Rs.24.89 billion.

The total outlay will be Rs.565.42 billion as against the budgeted outlay of Rs.504.66 billion for the current fiscal. Similarly, the annual plan outlay will be Rs.217.51 billion for 2008-09 as against Rs.177.83 billion. The outlays will be from the state consolidated fund.

"By maintaining the revenue surplus and limiting the fiscal deficit to less than three percent, Karnataka will continue to receive the benefits of debt consolidation and waiver of central loans amounting to about Rs.6.5 billion per year," Chidambaram informed the members.

"The budget seeks to promote the development of human capital in the state by enhanced investments in education, health and social welfare. The budget also seeks to initiate special steps to improve the productivity of the farm sector and the economic condition of farmers," Chidambaram said.