Chief Minister HD Kumaraswamy finally answered the prayers of thousands of farmers across the state and announced that his government will waive farm loans up to Rs 2 lakh per farmer.
As this will cost the state exchequer Rs 34,000 crore, the budget presented on Thursday also announced the increase of fuel prices, motor vehicle tax, power tariff and alcohol prices in the state.
“Keeping in view the need to augment resources for the welfare needs of the state, I propose to increase the rate of tax on petrol from the existing 30% to 32% and diesel from 19% to 21%,” CM Kumaraswamy said.
This means that petrol price will be increased by Rs 1.14 per litre and diesel by Rs 1.12 per litre.
“Even with this increase, the rate of petrol and diesel will be lower in Karnataka compare to neighbouring states,” the CM added.
The taxation on consumption of electricity has also been increased from 6% to 9%. “The tax rate on consumption of energy will increase from 10 paise per unit to 20 paise per unit,” Kumaraswamy announced.
The state has also set a revenue target of Rs 18,750 crore for the Excise Department for the 2018-19 fiscal. The CM also proposed an increase in the existing rates of excise duty on Indian Made Liquor by 4% on all 18 price slabs.
“Till June 2018, Rs 4,674 crore excise duty has been collected. With this increase in excise duty, and with effective enforcement and regulatory measures, the department would be achieving a revised target of Rs 19,750 crore for the 2018-19 fiscal,” Kumaraswamy said.
Another major increase in tax has been for the motor vehicle tax on private service providers. An increase of 50% on motor vehicle tax for omni buses and private sector vehicles under lease agreement with industrial undertakings.
The taxes are generally set based on the sq m area of the floor of the vehicle. The existing rates of Rs 1,100, Rs 1,200, Rs 1,300 and Rs 1,500 of motor vehicle tax has been increased to Rs 1,650, Rs 1,800, Rs 19,50 and Rs 2,250 respectively.