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LATEST NEWS UPDATES | Karnataka Budget gives prime place to agricultural sector by S Rajendran

Karnataka Budget gives prime place to agricultural sector by S Rajendran

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published Published on Feb 24, 2011   modified Modified on Feb 24, 2011
Estimated expenditure on farm and irrigation sectors is Rs. 17,857 crore

The agricultural sector has been given prime place in the State Budget presented to the Legislative Assembly on Thursday by Chief Minister B.S. Yeddyurappa, who also holds the Finance portfolio.

Mr. Yeddyurappa's focus on agriculture is reminiscent of the Union Budget presented by the first Janata Party Government of Morarji Desai in the post-Emergency era.

The estimated expenditure on agriculture and irrigation is Rs. 17,857 crore, which is a quantum jump in allocation.

Successive State governments have dropped the interest rate on cooperative farm loans from 2004-05. This budget sees a reduction of the interest rate to 1 per cent. It is another matter that only those farmers who promptly repay loans will be eligible for the new rate, which also carries a ceiling of Rs. 3 lakh on the principal.

Presenting the Budget Estimates for 2011-12, Mr. Yeddyurappa said, “The rate of interest will continue to be 3 per cent on crop loans up to Rs. 50,000 obtained from commercial banks.”

The budget estimates present a surplus of Rs. 1,278.94 crore in the revenue account and a deficit of Rs. 984.16 crore in the capital account, resulting in an overall surplus of Rs. 294.78 crore. The budget also indicates a 22.60 per cent increase in the State's annual plan size, from Rs. 31,050 crore to Rs. 38,070 crore. The fiscal deficit in the coming year is expected to be Rs. 12,482 crore, which is 2.87 per cent of the Gross State Domestic Product. The budget outlay for 2011-12 has been increased to Rs. 85,319.

Mr. Yeddyurappa has not only refrained from enhancing the tax rates but has also provided relief (Stamps and Registration) as well tax exemption on paddy, rice, wheat, pulses, etc. Value-added tax on jewellery has been raised from 1 per cent to 2 per cent and betting tax (Bangalore Turf Club) from 4 per cent to 8 per cent. A quantum jump has also been made in the budgetary allocation for Bangalore city: Rs. 4,770 crore for infrastructure apart from setting up a business park at Devanahalli through on the public-private partnership model. The Bruhat Bangalore Mahanagara Palike and the Bangalore Development Authority will also get special assistance of Rs. 350 crore and Rs. 750 crore respectively for various development projects.

The Chief Minister walked the distance to the State Secretariat from his official residence along with a group of farmers and Ministers. Soon after presenting the budget, he went to a nearby venue where farmers were present in strength.

The Hindu, 25 February, 2011, http://www.hindu.com/2011/02/25/stories/2011022566480100.htm


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