JD (S)-BJP coalition to impose fresh taxes in Karnataka

The JD (S)-BJP coalition in Karnataka appears poised to impose fresh taxes in Karnataka to off-set the revenue loss arising out of its populist schemes like loan waiver, besides ban on sale of arrack and lotteries.

Karnataka’s Deputy Chief Minister B S Yediyurappa, who is also the Finance Minister, told reporters that the coalition Government’s decision to waive agricultural loans and ban arrack and lotteries will have an impact on the state finances.

“These programmes entailed a huge expenditure and could not be carried out without the support of additional resources. A section of the people, who have the ability to pay more taxes, will be tapped for more resources”, Yediyurappa said triggerring concerns about a imposition of fresh taxes in the Karnataka state budget scheduled to be presented later this month.

Apart from the loan waiver scheme, which will cost the Government a whopping Rs 40 billion, the ban on arrack will cause a loss of Rs 19 billion to the state exchequer every year. As if the loan waiver and ban on sale of arrack were not enough, Chief Minister H D Kumaraswamy has promised to ban even lotteries, which he said had become a source of menace in the society.

Yediyurappa said the farmers, who had obtained agricultural loans from banks, had already stopped repaying their dues. However, he said the State Budget will unveil the finer details of the crop loan waiver scheme.

To a question, Yediyurappa denied that the Government was introducing populist schemes at the cost of the taxpayer’s money. He said the farmers deserved sympathy from the Government. “These decisions cannot be viewed as gimmicks. Elections are not round the corner”, he said.

Chief Minister H D Kumaraswamy too corroborated his Finance Minister’s views and said the coming Budget could be somewhat dearer to the white-collared class. But, the Budget will be pro-farmer and pro-poor, he said.