 "Siddaramaiah pulls bunny out of his hat")
This is his 8th budget as finance minister of the state and first as chief minister during his 40-year-long political career.
With the aim of mobilising additional resources to fund the ambitious rice subsidy scheme (Rs 1 per kg rice scheme), enhancement of milk incentive, waiver of crop loan and the loan waiver among others, he has proposed to increase the rate of additional excise duty (AED) by 16 per cent to 40 per cent across the 17 slabs.
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He has projected a revenue surplus of Rs 596 crore which is 36.8 per cent lower than the previous year. In 2012-13 the revenue surplus was Rs 943 crore.
Keeping in view the upcoming elections to the Parliament, Siddaramaiah, who holds the finance portfolio, announced a few relief measures. He has announced a reduction in the sales tax on diesel from 16.75 per cent to 15.65 per cent. With this reduction at the current prices, the price of diesel would come down by 51 paise per litre in Bangalore.
Given the present volume of diesel sold in the state, this tax reduction would cost the exchequer about Rs 300 crore per year. Considering the request of the sugar factories which are facing financial hardship, he has reduced purchase tax by Rs 20 and road cess by Rs 5 per tonne of sugarcane payable by them. He also withdrew the current entry tax of 1 per cent on sugar.
Interest free (zero per cent) short term loans will be made available to the farmers up to Rs 2 lakh and at the interest rate of 1 per cent for Rs 2 lakh to Rs 3 lakh from cooperative institutions.
The net effect of the various relief measures would fetch the government additional revenue of Rs 1,452 crore.
The overall size of the budget is Rs 1,21,611 crore, a growth of 18.36 per cent over the previous year’s Rs 1,02,742 crore. The state plan size has risen 16 per cent to Rs 48,685 crore for 2013-14.
The total receipts are estimated at Rs 1,20,717 crore during 2013-14. The budget estimates envisage revenue receipts of Rs 97,986 crore and capital receipts of Rs 22,731 crore including borrowings of Rs 22,396 crore. The total expenditure is estimated at Rs 1,21,611 crore consisting of Rs revenue expenditure of Rs 97,391 crore and capital expenditure of Rs 18,380 crore. The debt repayment would be Rs 5,840 crore for the year.
The fiscal deficit is expected to be Rs 17,449 crore, which is 2.9 per cent of the GSDP. Total liabilities at Rs 1,36,078 crore at the end of 2013-14 are estimated to be 22.62 per cent of the GSDP. “This is within the limit of 25.4 per cent for 2013-14 mandated by the Karnataka Fiscal Responsibility Act. Therefore, all these three fiscal parameters are within the mandate of the Karnataka Fiscal Responsibility Act,” Siddaramaiah said in his budget speech.
Resource mobilisation
The state’s total own tax revenue for 2013-14 is estimated to be Rs 62,464 crore with an increase of 20.5 per cent over the budget estimate for 2012-13. Of this, Rs 4,038 crore is expected to be collected from non-tax revenues. The state government expects to receive Rs 15,056 crore by way of the share in the budget 2013-14 in the Central Tax and another Rs 16,428 crore as grants from Government of India. These revenue receipts are estimated to be supplemented by gross borrowings of Rs 22,396 crore, non-debt receipts of Rs 200 crore and recovery of loans to the extent of Rs 135 crore.
With Lok Sabha elections round the corner, the chief minister has exempted footwear costing up to Rs 300 per pair from tax, increased annual income limit for exemption from payment of professions tax fixed for pigmy agents and other similar agents from the present Rs 36,000 to Rs 1.2 lakh on a par with other salary earners.
He has also given 50 per cent concession in motor vehicle tax payable by maxi cabs exclusively carrying school children.