If there was hope that the Janata Dal (S)-Congress first budget in Karnataka would move to wipe off the five years of drift and kickstart the economy on a high-growth path, those expectations have been belied. There is little to suggest that Kumaraswamy’s budget is growth-oriented or designed to incentivise the software sector to deliver strongly in the country’s software capital. Instead, it is populism and giveaways at work to woo the powerful farmer vote bank. True to promise, the king of all budget proposals is farm loan waiver which slaps a Rs 34,000 crore expenditure which the State would struggle to mobilise resources for through higher taxes and by diverting the unused funds from various welfare schemes. Considering that the State is already bearing the brunt of a partial farm loan waiver which the predecessor Siddaramaiah Congress government had announced in February last, this is a budget that should bring a smile on farmers’ faces and a frown on predominantly urban consumers. As a sop to the Congress, which is JD (S) chief Kumaraswamy’s main prop, all the welfare schemes announced by the erstwhile government to woo voters in the Assembly elections would continue to get funding. Whether that would leave anything for giving a fillip to industry is none of Kumaraswamy’s concern.
Essentially, to mobilise resources to meet the farm loan waiver cost, new taxes have been proposed on goods that are high consumption items in the urban sector. For instance, a cess of Rs 1.4 a litre has been imposed on petrol and Rs 1.12 a litre on diesel despite all the noise that Congress president Rahul Gandhi has been making on the price increases in these two across the country. Power tariff has been hiked by 20 paise a unit while tax on liquor which is justifiably a favourite whipping boy has been raised by four per cent. For vehicle-owners, the road tax in the State has been hiked. There is hardly anything that would generate new jobs and bring succour to the growing populace of jobless youth. Mercifully, there is a leg-up for road-users in Bengaluru in so far as six elevated corridors have been provided for at a cost of nearly Rs 16,000 crore which will be inter-linked. There is also a welcome resolve to tackle ‘garbage mafias’ but how effectively the government takes on these well-entrenched vested interests remains to be seen. But all in all, it is a budget with little to inspire and much to rue.