Salary, pension bonanza for Govt employees; sops for farmers

Mangaloretoday/ DHNS

Bangalore, March 21: Chief Minister D V Sadananda Gowda on Wednesday proposed revising salary and pension for over five lakh state government employees and an equal number of pensioners as he made an additional provision for Rs 4,450 crore for the purpose in the State Budget for the next fiscal year.
Presenting his maiden Budget for the fiscal year 2012-13 in the State Assembly on Wednesday morning, Sadananda Gowda, who also holds the finance portfolio, said salaries and pensions would go up by an average of 22.5 per cent over the existing amounts.

 

With an eye on the next State Assembly elections, which may be held before it is time for presenting another budget, the chief minister announced several sops for farmers and the middle class.

He announced that crop loan up to Rs 1,00,000 will now be interest-free. Now, the loan comes with a nominal 1 per cent interest. He announced a marginal cut in the excise duty rate on diesel—from 18 per cent to 16.75 per cent. This may reduce the retail price of diesel by about 50 paise.

Sale and purchase of property, too, will become cheaper as the chief minister proposed reducing Stamp Duty on property registration from the existing 6 per cent to 5 per cent of the registration value. Besides, he announced slashing VAT rates on a number of items like readymade garments, ready-to-cook chapati and parota, dry chillie, surgical footwear and gold jewellery, noble metals, precious and semi-precious stones.

Like his predecessor B S Yeddyurappa, Gowda proposed to dole out hefty grants to religious mutts, caste-centric institutions, mainly falling in the OBC bracket. All these he proposed without increasing tax rates on any item that directly affects the common man. In the process, he made no effort to contain the ballooning cost of various subsidies, which are threatening to upset the state’s finances.

However, the rich and those with some bad habits will have to pay more by way of taxes to finance the state government’s additional commitment on the expenditure front.
Five days after Union Finance Minister Pranab Mukherjee proposed hiking taxes on cigarettes and such other items, Gowda followed the same path. He announced tax hikes for cigarettes and tobacco chewing, alcohol, beer and wine.

The VAT rate on cigarettes and other tobacco products was hiked from 15 per cent to 17 per cent, additional excise duty on liquor (IML) increased from 7.5 per cent to 10 per cent in different slabs and additional excise duty on beer and low alcoholic beverages increased to 7.5 per cent.

The budget proposal will also make taxi rider costlier. For motor vehicles costing more than Rs 10 lakh, the owners will have to pay a life-time tax at the rate of 15 per cent of the cost of the vehicle. However, no change was proposed for motor cabs in the less than Rs. 10 lakh category and taxes in this category will continue to be payable on a quarterly basis as per existing rates.

Sadananda Gowda also proposed a sharp hike in betting tax on book-makers at Bangalore and Mysore Turf Clubs. Luxuries provided in conventional halls, seminar halls and at temporary structures operating as marriage halls will cost more.

Except for announcing implementation of two big ticket projects—Upper Krishna Project stage III and Bangalore metro phase II—Sadananda Gowda did not propose any new scheme or project in his Rs 1,02,742 crore budget. He continued almost all schemes initiated by Yeddyurappa.

That the State’s economy is on a shaky wicket is evident with considerable decrease in State’s plan size compared to last year (from 22.6 per cent in 2011-12 to 10.4 per cent in 2012-13). Allocation to key sectors like agriculture, energy and health, as a result, has shrunk compared to 2011-12. The plan size, which is yet to be finalised in consultation with the Planning Commission, is pegged at 42,030 crore, against Rs 38,070 crore of 2011-12 fiscal.

Though Yeddyurappa and his loyalists had demanded that Sadananda Gowda should not be allowed to present the budget, they were also present in the House on the occasion.

At a glance

To cost more
(with effect from April 1)

* Cigarettes & other
    tobacco products    15 pc-17 pc
* Beedis     5 pc VAT
* Beer - excise duty
    up by     7 pc
* Liquor (IML) -
    excise duty up
    is in range of      7.5 pc-10 pc
* Plastic woven
    fabrics    5 pc VAT
* Renting marriage
    halls, seminar,
    convention halls
* Life time tax on
    Motor cabs costing
    more than Rs 10 lakh     15 pc
* Betting tax by
    private bookies in
    Bangalore & Mysore

TO COST LESS

* Diesel - 18 pc-16.50 pc
* Gold jewellery, noble metals,
    precious, semi-precious             stones- 2 pc to 1 pc
* Registration fee for sale     deeds of immovable     properties down by 1 pc
* Readymade     garments
    14 pc to 5 pc
* Fruit wine - 50 pc     reduction in
    excise duty
* Ready to cook     chapati,
    parota  -     14 pc to 5 pc
* Unginned raw cotton - 5 pc to             2 pc
* Dry chilli - 5 pc to 2 pc
* Surgical footwear -     14 pc to 5 pc
* Braille watches - No tax
* Blackboards - 14 pc to 5 pc
* Naphta - 14 pc to 5 pc