Bangaloreans fear grey in Green Budget

Chief minister BS Yeddyurappa has left not much for imagination on his next budget as he is determined to soak it in dark green. He is giving final touches to the first exclusive agriculture budget apart from the general budget.

The budgets will have all the ingredients of one that is generally presented by a government in the last year of its tenure, but ironically Yeddyurappa is presenting it bang in the middle of his five-year tenure.

Farm loans at a mere 1% interest, substantial increase in allocation for irrigation works in the backward Krishna basin, incentives and subsidies for farmers switching over to organic farming, attractive schemes for purchasing cows and other livestock to encourage dairy farming, sheep rearing and poultry are on the way to cheer up the farming community. The chief minister is also expected to continue his trend of liberal grants for various mutts and religious institutions.

But Yeddyurappa’s impending ‘sop opera’ has rendered other sectors of the economy and urban electorate apprehensive.

The industrial and transport sectors apart from millions of people residing in urban areas are desperately hoping for a respite from the spiralling prices of petroleum products. “Tax on petrol and diesel is highest in Karnataka among the southern states. It is about 30% on petrol and 23% for diesel, including the entry tax, while it is as low as 10% in several other states. We have made a strong plea to reduce it. Any relief would help not just commuters, but even bring down the prices of manufactured goods too,” chairman of the Karnataka state council of the Confederation of Indian Industry (CII) Aroon Raman told DNA.

However, sources in the finance department made it clear that the chances of any reduction in tax on petroleum products was slim.

IT sector, especially BPOs, have made a strong pitch to lift the Value Added Tax (VAT) on software services. “Software services cannot be treated like manufacturing sector. All export services are eligible for VAT exemption. The tax-assessment processes and procedures should be simplified for software sector,” says Aroon Raman.

A big push for the hardware technology park and aerospace special economic zone near Devanahalli through tax holidays and other concessions is another much needed initiative the industry is looking forward to from the chief minister as it has huge employment potential.

Exorbitant land prices have become a deterrent for industries around Bangalore and president of Federation of Karnataka Chambers of Commerce and Industry (FKCCI) NS Srinivasamurthy is for reviving the earlier model of government allotting industrial sheds instead of providing lands for industries.
On the power front, the chief minister may maintain a steady raise in allocation to keep his promise of making the state self-reliant in energy.

The needs of Bangalore to address its infrastructure woes is huge. A big announcement on implementing monorail feeder services to complement the ongoing metro project is in the offing along with a slew of programmes to improve drainage and drinking water supply in the newly-added areas of BBMP.

As the chief minister is ready with a sop filled budget, the question being asked is “where will the money come from”.  When the resources were scarce, financial prudence was the need of the hour, felt noted economist, Prof Abdul Azeez from the Institute for Social and Economic Change (ISEC).

There has to be an emphasis on raising the agricultural growth rate to over 4% and mere reducing the interest rate on farm loans is not enough. “Mixing politics with economics is an unhealthy trend. Repeated waiver of loans and reduction in interest for farmers has become a political practice. Loan and interest is just one aspect of agriculture. Practical programmes to improve soil fertility, raise agricultural productivity, water conservation, extending agriculture marketing facilities to the doors of farmers, bridging the gap between labs and land in implementing modern techniques, working out a price mechanism to ensure adequate returns for farmers should be the priority,” Azeez said.

With economy yet to recover completely and resource mobilisation still posing a big problem, the avenues for additional revenue generation is limited. The government is even contemplating bringing down the stamps and registration fee to revive the real estate sector. Lopsided priorities are leading to financial profligacy in agriculture. It is also breeding economic indiscipline.

Yeddyurappa would do great service to sons of the soil if he takes a holistic view of their woes instead of applying temporary balm.