No new taxation measures

By S. K. Ramoo

BANGALORE, MARCH 27. The maiden Budget of the S. M. Krishna Government for 2000-2001, showing a deficit of Rs. 290.70 crores, is a clever admixture of rationalisation of levies and reliefs. There are no new taxation measures.

The receipts are expected to be Rs. 19,664.76 crores comprising revenue receipts of Rs. 15,212.65 crores and capital receipt of Rs. 4,452.11 crores. The expenditure is estimated at Rs. 20,061.06 crores, of which the revenue expenditure will be Rs. 17,154.94 crores and capital expenditure Rs. 2,906.12 crores.

Tax relief of Rs. 77 crores is proposed. By way of additional tax mobilisation, the Government has planned to raise Rs. 360 crores. Mr. S. M. Krishna, who holds the Finance portfolio, announced that the Government hoped to cover the deficit through expenditure control and buoyancy of taxes. He said the Government was seeking an vote on account for four months, ending July 31, 2000. It would come out with a White Paper on the State's finances on March 31. A medium-term fiscal management policy would be announced.

Mr. Krishna admitted the financial position was ``grim'' mainly because of the repayments due from the account of Krishna Jalay Bhagya Nigam Bonds and additional expenditure following the implementation of the 5th Pay Commission's recommendations. The Government proposed to eliminate the revenue deficit by 2004. The objective would be to stabilise the fiscal deficit at around 3 per cent of GSDP by 2004.

Coffee exporters would be exempted from the purchase tax, if coffee was exported within four months from the date of purchase. He said this relief would be extended to pepper and cardamom exporters. Mr. Krishna announced reliefs to export-oriented units and declared reduction in the rates of stamp duties on sale deeds to the farming community and also to those living in the urban areas other than the Bangalore Metropolitan Regional Development Authority limits. To maintain parity in the licence fee structure with neighbouring States, there will an increase in licence fee on distilleries, breweries, wineries and bottling of liquor. The duty on arrack will be increased from Rs. 17 to Rs. 20 per bulk litre.

Value Added Tax (VAT) would be introduced from April 1, 2001 and for this purpose a Taxation Reforms Commission would be established. Mr. Krishna announced the introduction of concurrent social audit for all government schemes and programme. To make the transactions of the Government transparent and accountable, a Right to Information Bill would be enacted.

The Chief Minister said amendments would be brought in to the Karnataka Municipalities Act shortly for levying infrastructure fee on all vehicles, ranging between Rs. 50 and Rs. 100 for raising resources for civic bodies. A solid waste management cess would be introduced relating to property tax in Bangalore city.

The Government proposed to double the number of students, who graduate in IT from 9,620 to 20,000 and announced setting up of incubation centres for IT and bio-technology entrepreneurs, he said and declared that a State council for IT education and training would be established.

Mr. Krishna pointed out that only 37 per cent of the electricity supply was metered and hence proposed to meter all power installations in a phased manner. He said over 60 per cent of the current year's revenue deficit was on account of power subsidies, and an endeavour would be made to extend them only to the poor and needy. He added that the infrastructure cess levied on sales tax, excise licence fees, motor vehicles tax and non-judicial stamps would be extended by two more years.

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