Pro-industry measures take precedence over political compulsions

In the past three years he has been consistently criticised for letting his political compulsions and constituency take precedence over larger economic concerns while presenting his budgets, but this time, Chief Minister Siddaramaiah seems to have attempted to break that image.

Karnataka Chief Minister Siddaramaiah presenting the budget amid a power cut in the Vidhana Soudha in Bengaluru on Friday. Photo: V. Sreenivasa Murthy

With no election to face in the near future, new populist measures that could result in a greater burden on resources were kept out of Friday’s budget. Instead, he chose to impose an additional tax burden on the middle class and the rich.

Interestingly, praise for the budget has come mainly from the sectors such as information technology, while concerns have been raised over lack of concrete measures to tackle the agrarian crisis, especially the issues of small farmers.

He also refrained from announcing any further ‘bhagya’ schemes, such as Anna Bhagya, which have been a trademark of his earlier budgets; most of the tax burden now has been to fund those schemes.

He also avoided major announcements that specifically target his core electoral constituency referred to as ‘Ahinda’ (acronym for minorities, backwards and Dalits).

The Chief Minister claimed that budget proposals had not burdened the poor and the middle class, and taxes had been increased taking into account the resources required to meet the development needs of the State.

He justified the increase in taxes, saying that the Union government had increased excise duty three times on petrol and diesel during this fiscal (2015–16) despite steady fall in crude oil prices in the international market.

The State’s resource mobilisation from petrol and diesel has been adversely affected owing to continuous fall in crude oil prices. However, the target has been reached through sustained efforts and effective monitoring.

With two more years to go for the Legislative Assembly elections, the Chief Minister seems to be signalling industrialists positively with pro-industry measures.

Experts said the Chief Minister may announce populist schemes to various communities in the next year’s budget (2017–18), ahead of the 2018 Assembly elections.

Besides announcing several measures to develop air and road connectivity to tier-II cities, Mr. Siddaramaiah said a non-profit company – Invest Karnataka – would be established for development of proposals and market intelligence.

As an icing on the cake, the Chief Minister also announced holding ‘Pravasi Bharatiya Divas’ in Bengaluru in coordination with the Union government in January 2017. All this comes at a time when there has been sharp criticism that Karnataka is losing its place in investor confidence.

Posted by on March 20, 2016. Filed under State. You can follow any responses to this entry through the RSS 2.0. Both comments and pings are currently closed.