State cuts entry tax on tobacco products by half

The Karnataka government today announced many programmes and tax measures, including the reduction of entry tax on tobacco products to 2 per cent from 4 per cent, to discourage illicit trade in such products.

In his reply during a budget discussion at the state legislative assembly, chief minister B S Yeddyurappa said, “In my budget proposals for 2010-11 presented on March 5, 2010, I had raised value added tax on tobacco products to 15 per cent from the earlier 12.5 per cent. As per the suggestion of many including opposition parties I have decided to reduce the entry tax on tobacco products. This will discourage illicit import of such products from neighbouring states.”

He said the state’s plan size for the year 2010-11 has been enhanced by Rs 50 crore to Rs 31,050 crore by the planning commission, a growth of 20 per cent over 2009-10. The state had earlier fixed the plan size at Rs 31,000 crore for the year.

For the present financial year-ending March 2010, the plan expenditure has gone up 15 per cent to Rs 25,967 crore. The plan expenditure, for year-ending March 2010, would touch Rs 23,329 crore, as against Rs 12,517 crore as of December 31, 2009, as per the revised estimates, he said.

The chief minister also announced a minimum support price (MSP) for two more commodities such as coconut and copra from the next financial year. During 2009-10, the state government had announced MSP on maize and arecanut. The exact amount for procuring the two commodities will be announced later, he said.

The state’s debt would touch Rs 82,513 crore for year-ending March 2010, a growth of 15.5 per cent over the previous year, he informed the house. This includes borrowings from the Central government, Life Insurance Corporation of India, Nabard, Hudco and other corporations.

Yeddyurappa also announced upgradation of Kittur Rani Chennamma postgraduate centre at Belgaum operated by Karnatak University, Dharwad, into a separate university. This university will come into existence from the year 2010-11. A special officer will be appointed for this purpose shortly, he said adding that the new university will work towards imparting quality education to the people of border district of Belgaum.

Other new measures announced by the chief minister include extension of free bicycle facility for 8th standard girl students staying in hostels and holding bus passes from the next academic year. In order to promote communal harmony in villages, the state government will provide financial assistance to selected villages, which are free of internal disturbances.

The chief minister said the government would set up a new examination board within the pre-university board from the next financial year. He also announced an untied financial grant of Rs 1 crore to every zilla panchayat in the state from the next fiscal.

“The government is committed to extending agriculture credit to farmers at the rate of 3 per cent. The government will spend Rs 2,500 crore to supply free electricity to farmers in the state,” Yeddyurappa said.