KARNATAKA BUDGET 2009-10

HIGHLIGHTS

OVERVIEW OF BUDGET 2009-10 (Rs. in Crores)

Total estimate : 58031.36

Revenue receipts : 48389.04

Capital receipts : 9642.32

Revenue expenditure : 47237.67

Capital expenditure : 10879.57

Plan estimate : 29500.00

Government Undertakings and Local Bodies expected to raiseRs. 6,604 Crore through internal sources and loans.

Fiscal deficit limit has been increased in the year 2008-09from 3% to 3.5% under Fiscal Responsibility Act.

Priority sectors

Emphasis on Agriculture and allied activities, RuralDevelopment, Water resources, Power, Roads, Urbandevelopment and Education.

Rs.2, 440 Crore has been earmarked for Agriculture andallied activities.

Rs.3, 063 Crore earmarked for Rural Development.

Rs.4, 714 Crore provided for Irrigation works.

Budget provision has been enhanced to Rs.6, 107 Crore forPower Sector, both in plan and non-plan.

Rs.1, 327 Crore earmarked for transport sector.

Rs.7, 376 Crore (approx.) for Urban Development includingBangalore city.

Rs.8, 888 Crore will be spent for education sector.

2

Agriculture related activities

Subsidy of Rs.250 crores for Agricultural loans, at 3% interestfrom nationalised and commercial banks includingcooperative institutions.

Increase of revolving fund from Rs.500 crores to Rs.750 croresfor providing support price to agricultural products.

Support price for organic farming increased from Rs.100crores to Rs.200 crores.

Rs.150 crore subsidy to farmers for getting loan fromcooperative institutions at 3% interest.

Financial assistance of Rs.20 crore each, to the AgriculturalUniversity, Raichur and Horticulture University, Bagalkot.

Opportunity is created for 1,000 farmers to undertake studytour in foreign countries, to encourage them to learn modernscientific techniques of farming.

Establishment of horticultural produce market at Belgaum,at an expenditure of Rs.100 crores with private participationunder National Horticulture Mission.

Rs.10 crores for construction of turmeric market, agriculturalproduces processing unit and cold storage at Chamarajnagar

Rs.5 crore for establishment of a new Horticulture Collegeat Kolar

Subsidy of Rs.2100 crores for electrification of pumpsets usedin agriculture.

Water Resources and Irrigation

Increase in budget provision for irrigation projects toRs.4,714 Crore.

Rs.500 Crore for Upper Bhadra Project.

63,000 hectares land will get irrigation facilities this year.

Rs.2193 Crores for implementation of Chimmalagi LiftIrrigation Project in Bijapur District.

3

Rs.120 Crores provided for the second phase of GuthiBasavanna Lift Irrigation Project in Bijapur.

Special efforts for comprehensive survey and rejuvenationof all water bodies and tanks with the help of ISRO andKSRAC. Rs.764 Crore additional budget has been providedto Department of Minor Irrigation and RDPR for this purpose.

Rural Development

Rs. 300 Crore will be provided for development of 1,200villages under the Suvarna Gramodaya Programme duringI phase.

Rs.325 Crore spent during 2008-09 for laying of 1,124 kmroads. Under Prime Minister’s Gram Sadak Yojana 7,880km of roads were laid so far.

Rs.800 Crore has been provided to develop 2,500 km ruralroads.

A project of Rs.5000 Crores with private partnership underannuity payment basis has been planned for providing roadsin rural areas.

500-foot bridges and hanging bridges will be constructed inthe hilly and forest areas of Malnad region. Rs.25 Croreshas been earmarked for this.

Urban Development

Rs.3, 000 crore earmarked for development of Bangalore city.

Excluding the city municipalities, special grant in aid of Rs.15crores, to every other municipality in district centres andcities. Rs.5 crores to every municipality in taluks and smalltowns and Rs.2 crores special grant to every townpanchayath.

Rs.1000 crores from the Bangalore Development Authorityto Bangalore Mahanagar Palike for development of basicinfrastructure and developmental works by Bruhat BangaloreMahanagara Palike at a cost of Rs. 500 crores.

4

Implementation of a special programme of Rs.2000/- crores,for upgradation of important roads in the Bruhat Bangalorearea, with private partnership to maintain them.

Rs.600 crores to increase the supply of drinking water inBangalore.

Rs.100 crore will be provided to recycle underground drainagewater leading to tanks.

Rs.600 crores as State Government contribution to the MetroRail Corporation.

Rs.500 crores to start a luxury bus service, with a minimumfleet of 1000 deluxe buses.

Providing ring roads to Belgaum and Bellary cities withprivate participation. Rs.120 Crore will be provided forimproving underground drainage in Belgaum.

10,000 homes will be constructed for people living in slums.

Infrastructure Development

Rs.500 crores capital grant to KRDCL for institutingKarnataka road fund for executing 10,000 kms of Statehighways and important roads and 12,600 kms roads inrural areas, with private participation.

Rs.380 crores for development of 3400 kms of Highwaysunder Karnataka State Highway Development Project-2, withthe assistance of World Bank.

Maintenance of important district roads, at a cost of Rs.400crores under Chief Minister’s Rural Road Developmentscheme and roads and bridges under NABARD assistance ata cost of Rs.230 crores.

Extension of Railway Network

State Government will provide 50% share for laying newrailway lines, between Belgaum-Dharwad, Kuduchi-Bagalkot,Gadag-Haveri and Almatti-Koppal.

KSIIDC to implement super fast train to BangaloreInternational Airport in PPP model.

5

Development of Ports

Setting up of a “Karnataka Maritime Board”, for thedevelopment of Ports. Rs.100 Crore is provided forconstruction of good ports in the Western Coastal regions ofKarwar, Thadhadi, Honnavar, Malpe and Old Mangaloreunder PPP Model.

Rs.10 Crore provided for dredging of Karwar Port.

Airports

Rs.100 Crore provided for construction of Airports in thecities of Gulbarga, Bijapur, Shimoga, Hubli, Bellary andMysore.

Schemes for Power Generation

Infrastructure to be provided for establishment of new powerplant with capacity of generating 1015 MW at Udupi. Newpower plant to be established in Hidkal and Gulbarga.

Increase in the share capital by Rs.500 crores, in KarnatakaPower Corporation Ltd. to undertake projects in the publicand joint sector.

Extending the “Niranthara Jyothi” Scheme already initiatedin Malur, to other backward taluks in a phaced manner.

Providing electricity to all hutments and thandas of the State.Rs.100 Crores will be spent under the “Ganga Kalyan”Scheme for electrification of 10,000 irrigation pumpsets forfamilies below poverty line.

Social Welfare

Hike in pooled fund for housing, educational facility etc ofscheduled caste and scheduled tribe from Rs.200 crores toRs.600 crores.

Increase in boarding costs of students of residential andAshram Schools from Rs.350 to Rs.500 per month.

Establishment of 114 ‘Kitturu Rani Chennamma ResidentialSchools’ at a cost of Rs.100 crores for the benefit of girls ofscheduled castes and scheduled tribes.

6

Incentive of Rs.10, 000 for scheduled caste and scheduledtribe girls securing above 75% marks in 10th Standard andRs.5000/- for girls securing above 60% marks.

Increase in the intake of number of students in hostels by50%. Special arrangements for training girls in computerlanguage skills and mathematics at a cost of Rs.20 crores.

Rs.150 crores for developing scheduled caste and scheduledtribe colonies.

Renaming of Lidkar Corporation as JagajivanramDevelopment Corporation and earmarking of Rs.5 crores fortechnical assistance and market exposure to familiesdependant on leather craft.

Rs. 5 crores for construction of Jagajivanram MemorialBhavan.

Framing of rules for converting Lambani Tandas into revenuevillages and grant in aid of Rs.10 lakhs for converting SevalalBhavans in 200 lambani tandas.

Rs.10 crores for building district level Banjara Bhavans inGulbarga, Bijapur, Haveri, Chitradurga and Shimogadistricts.

Rs.50 crores to provide basic infrastructure facilities to 500banjara thandas.

Rs.5 Crore for developing Gollara Hattis.

Rs.50 crores for construction of backward class students’hostels.

Rs.20 crores for providing basic facilties to Vishwakarma,Kshatriya, Uppara, Savitha, Kuruba, Madivala, Devanga,Billava Community Organisations.

Loan upto Rs.5000 and Rs.5000 Grant-in-Aid throughDevaraj Urs Development Corporation to one-lakh familiesengaged in Kammara, Kumbara, Badiga, Devanga,Murthedara, Akkasaliga, Dargi, Kshourika.

7

Rs.35 Crore for construction of hostels for minorities andRs.15 Crore for construction of Shaadi Mahals.

Rs.5 Crore for the skills development of minorities.

Rs.5 Crore for building Haj Bhavan.

Rs.10 Crore for minority institutions belonging to Christian,Buddhist, Jain, Sikh, etc.

Women and Child Development

Rs.20 Crore for construction of 5,000 houses for Devadasiwomen.

Rs.10 lakhs grant in aid for construction of Sthree Shakthicomplex, comprising of market centres in every taluk.

Rs.400 monthly pension to destitute women aged above 50years.

Housing

Rs.1,200 Crore provided for 3 lakh houses to be constructedby the Rajiv Gandhi Rural Housing Corporations andconstruction of 1 lakh houses under the Indira Avas Scheme.

Rs.100 Crore for providing one-lakh sites under Ashraya,Ambedkar, Indira Avas Yojana and other similar schemes.

Subsidy for Skill Training

Rs.100 Crore provided for skill development programmes.

Training subsidy ranging from Rs.3000 to Rs.10000 will beprovided for ITI's educational institutions and IndustrialCentres for providing training.

Establishment of skill development centres in hostels of SC/ST’s and backward classes and minorities.

Rs.15 Crores for establishing special training centres in everydistrict, to train in apparel making.

Food

Rs.750 crore for supplying essential commodities to familiesbelow poverty line through Public Distribution System.

8

Incentives for Development of Industries

Equity contribution of Rs.50 Crore to Mysugar Company.

Rs.1000 Crores allocated for acquiring land by the KIADB toform industrial estates, to encourage the establishment ofsmall and medium industries.

Rs.80 Crores provided for establishing Apparel Clusters inGulbarga, Bellary, Hubli, Belgaum, Bagalkot, Shimoga,Davangere, Ramanagar and Chikballapur.

Support for Weavers

Rs.30 Crores has been provided for weavers to constructliving cum work sheds at a cost of Rs.60,000 per unit, for5,000 beneficiaries.

Continuation of the scheme of providing loans at an interestrate of 3%.

Animal Husbandry and Dairy Farming

Rs.200 crores for providing subsidy of Rs.2 per litre for thefamilies of farmers, through milk producers’ co-operativesocieties.

Rs.5 crores for insurance of livestock to groups formed bysheep and goat rearers to encourage following scientificrearing methods.

Grant of Rs.10 lakhs for each taluk to the voluntaryorganisations for establishing goshalas for cattle protection.

Rs.5 Crore subsidy for 1000 new milk producers’ co-operativesocieties in the districts of North Karnataka.

Rs.10 Crore to establish cold storage units in Gulbarga andBelgaum divisions.

Rs.10 Crore to develop the Amruthmahal Kaval landsattached to the Karnataka University of Veterinary Sciencein Chikmagalur district.

9

Fisheries

2,000 self help groups to be formed and financial assistanceof Rs.50, 000 as loan and Rs.10, 000 as seed money to bedisbursed to these groups.

Loan to fisherman at an interest rate of 3%.

Agricultural marketing

Rs.750 Crores for support price of agricultural crops.

A well equipped wholesale market for onions, potatoes to beestablished in Dasanpura Hobli, Bangalore North Taluk at acost of Rs.100 Crores.

Establishment of a well equipped vegetable market inByatarayanapura Bellary Road, Bangalore in Public PrivatePartnership model.

Project Plan for permanent water supply

Beginning with Bijapur and Chitradurga Districts, a specialscheme has been conceived to provide drinking water. Rs.100Crores of the total, Rs.800 Crores for supply of drinking waterhas been delineated for this scheme.

Rs.5 Crores is provided for giving awards to TalukPanchayats, Village Panchyats and Zilla Panchayats who haveexcelled in rural sanitation.

Rs.5 Crore for installing solar powered streetlights in ruralareas.

50% of the estimated cost of Rs.10 lakhs for construction ofeach Gram Panchayat office will be provided.

Primary and Secondary Education

Recruitment drive of teachers for the educationally backwarddistricts of the State.

Establishing 114 Secondary and Higher Secondary schools,with private partnership similar to Kendriya Vidyalaya. Thiswill be done under the aegis of the centrally sponsored SarvaShikshana Abhiyana Scheme in educationally backwarddistricts.

1 0

Relaxing of economy orders to recruit teachers for thevacancies in GIA schools. Rs.35 Crores has been providedfor the purpose.

Higher Education

Rs.10 Crore is provided for infrastructure to TumkurUniversity and Bijapur Women’s University.

It is proposed to rename Tumkur University asDr. Shivakumar Swamiji University.

Rs.2 Crore has been provisioned for starting a postgraduatestudy centre at Kushalnagar in Kodagu district.

Establishment of separate Ayurveda Vaidya University.

Rs.10 Crore for the establishment of a new university atDavanagere.

Rs.10 Crore for establishment of an Engineering college atGangavathi.

Rs.5 Crore for the establishment of Sanskrit-Veda universityat Bangalore, Music and Fine Arts University at Mysore anddevelopment of Sanskrit Research and Academy Centre atMelkote.

Health and Family Welfare

Procurement of 517 ambulances at a cost of Rs.221.25 Croresunder ‘Arogya Kavacha’. Free health insurance to poorfamilies.

Free medical assistance to 16 lakh poor families up to Rs.1.50lakh, through ‘Suvarna Aarogya Suraksha’ scheme inbackward district of Gulbarga Division.

Converting mental health hospital at Dharwad into anautonomous body and upgradation at a cost of Rs.10 crores.

Providing additional 250 beds in the general hospitals ofBelgaum and Bidar and upgradation of Bellary DistrictHospital.

Rs.15 crores for pre-natal care at the rate of 2000/-per headto pregnant women below poverty line.

1 1

Science and Technology

Rs.10 Crore for setting up of Institutions of Excellence inthe field of science education, upgradation of scienceeducation in colleges-universities. Science education centresat district levels and museums etc.,

1000 acres land for establishment of a branch of IndianInstitute of Science of Bangalore in Chitradurga district.

Information Technology and Bio Technology

Establishment of Biotech Park in important cities outsideBangalore. Rs.10 Crore for establishment of IT park inGulbarga Division.

Grant-in-Aid of Rs.20 lakhs per unit, for establishment ofinformation technology industries in Gulbarga Division.

Removal of regional imbalance

As per the recommendations of the Dr. D.M. NanjundappaCommittee Report Rs.2, 674 Crore is earmarked.

1,000 new milk co-operative societies to be formed in NorthKarnataka.

Cold storage unit to store milk one each in Gulbarga andBelgaum will be set up at an estimated cost of Rs.10 Crore.

Rs.10 Crore to establish IT Park in Gulbarga.

Supplementary Schemes for the IndustrialDevelopment of North Karnataka

Steel Zones will be established in 10000 acres at Koppal,Bellary and Bagalkot districts.

Foundry Parks to be established in Mache village of BelgaumDistrict.

Spice Park to be established in Byadagi.

Establishment of an Auto Park near Basavakalyan in Bidardistrict.

1 2

Providing of Infrastructure and Residential Workshop to thesilversmiths in the village of Mangoor in Belgaum district.

Labour Welfare

Rs.10 Crore provided for setting up unorganized LabourWelfare Board.

Rs.5 Crore to implement insurance scheme for autorikshawand taxi drivers.

Rs. 1 Crore for establishment of research centre aboutindustrial relations in Bangalore University in memory ofthe famous labour leader late Alampalli Venkatrao.

Revenue and Endowment

Rs.100 Crore for construction of ‘Suvarna Soudha’ inBelgaum.

Amendment to Land Reforms Act to enable purchase of landfor establishment of educational institutions and industries.

Development of district headquarters

Rs.25 Crore for development of Yadgir town as districtheadquarters and Rs.25 Crore for construction ofChikkaballapur district office complex.

Rs.10 Crore for development of Kaginele Kshetra.

Rs.5 Crore for development of Sri Renuka Yellamma Templeat Savdatti.

Rs.5 Crore for development of Male Mahadeshwara Hills,Biligiri Ranga Hill and Himavad Gopalaswamy Hill.

Rs. 10 crores for development of various cultural centers.

Rs.10 crores for development of integration centers.

Transport

Purchase of 4,000 new vehicles by the transport corporations.Rs.100 Crore for improving infrastructure development forcommuters.

1 3

Kannada and Culture

Rs.5 Crore for the Kannada Development Authority.

Rs.10 Crore for the formation of Border Area DevelopmentAuthority.

Rs.2 Crore to establish a research centre at the KannadaSahitya Parishad and for continuation of the Kannadadictionary project.

Rs.2 Crore to bring out an encyclopedia website in Kannadaon the lines of Wikipedia.

Rs.5 Crore for the inclusion of Kakati village to KitturAuthority and its development.

Rs. 5 crores for the construction of Amruthotsava Bhavanon the occasion of amruthotsava of Kannada Film Industry.

Rs. 10 crores for the construction of freedom fighters centersand memorials.

Press media

Rs.25 lakh for the construction of patrika bhavan in districtheadquarters.

Increase in the limit of annual income of retired journaliststo get monthly pension from Rs.5000 to 50,000.

Working Journalists and retired journalists to be broughtunder ‘Yashaswini Sahakara Arogya Vima Yojane’.

Providing free bus passes to members of the press, at districtlevel.

Tourism

Rs.180 crores for Tourism Department.

Rs. 10 crores for the development of Nandi Hills,Kemmannagundi and Kodachadri hill stations.

Rs.5 Crore for development of Tagore beach in Karwar.

Rs. 5 Crore for renovation of Brindavan garden in KrishnarajaSagar.

1 4

Youth Services and Sports

Rs.10 Crore for establishment of 10 sports hostels.

Rs.10 Crore for renovation and lying of tracks in stadias atDharwar, Gulbarga, Udupi and Mysore cities.

Rs.2 Crore for laying hockey turf in Coorg district.

Financial incentives to State’s sports person, selected asofficial participants in international sports events.

Increase in monthly pension to wrestlers.

Administrative Reforms

Establishment of Expenditure Reforms Commissionconsisting of experts.

Establishment of ‘Challenge Fund’ with Rs.10 Crore toencourage of new ideas in administration.

Government Employees

Decided to increase the HRA rates to 20% in Class-A cities,15% in Class-B cities and 9%, 6% and 5% in respect ofClass-C, D & E cities respectively.

The monthly wages for the daily wage employees who havecompleted 10 years will be increased by up to Rs. 1000.

Law

Rs.50 Crore for development of court buildings in districtand taluk head quarters.

Rs.10 Crore for development of Law University at Hubli.

Contribution of Rs.1 Crore to the Advocates Association’sWelfare Fund.

Tax Proposals

Increase in tax collection in 2008-09 expected to be 10.7%.

Commercial Taxes

Total revenue from Commercial Taxes during 2009-10expected to be Rs. 25125 crores.

1 5

Value Added Tax

Tax exemption on food grains and pulses extended for onemore year.

Tax on tamarind and soap-nut reduced to 2%.

Tax on coconuts, copra and desiccated coconut powderreduced to 2%.

Tax on arecanut reduced to 2%.

Baje exempted from tax.

Footwear costing upto Rs. 100 exempted from tax.

4% tax concession on some more goods sold through canteenstores department.

4% taxes on all tread rubber used in re-treading of tyres.

Sales Tax

Tax exemption on 75000 kilo liters of diesel sold to fishermen.

Luxury Tax

Tax exemption limit increased to Rs. 499/-.

Levy of tax on actual rents.

Tax slabs revised – 4% on room rents of Rs. 500/- to Rs.1000/-, 6% on room rents exceeding Rs. 1000/- upto Rs.2000/- and 10% on room rents exceeding Rs. 2000/-.

Tax on marriage halls reduced to 10%.

Tax on exhibition halls reduced to 10%.

Professions Tax

Persons with monthly salaries upto Rs. 10000/- exempt fromtax.

Branches of educational institutions running schools andcolleges upto 12th standard exempt from tax.

Entertainments Tax

10% tax on sports involving proprietary teams.

Tax on cinemas reduced to 30%.

1 6

State Excise

Tax collection expected to reach target of Rs. 5627 crores for2008-09.

Expected collection for 2009-10 Rs. 6565 crores.

Stamps & Registration

Tax collection expected to be Rs. 3318 crores for 2008-09.

Stamp duty on all transfer of moveable properties reducedfrom 7.5% to 6% resulting in revenue loss of Rs. 400 crores.

Stamp duty rates modified.

On agreements not involving transfer of immoveable property0.25% of agreement value.

1% for joint development agreement.

6% for arbitration award.

0.5% with a limit of Rs. 10,000 on mortgage.

Rs. 500 for duplicate registration.

1% to 6% on lease of immovable properties.

1% on General Power of Attorney to developers and Rs. 200on other General Power of Attorney.

5% on transfer of property through release.

Motor Vehicles tax

Estimated collection for 2009-10 – Rs. 2063 crores.

Lifetime tax on electric motor vehicles reduced to 4%.

* * * * *