Karnataka firm on banning arrack

Karnataka Deputy Chief Minister (DyCM) B S Yediyurappa, who also holds the finance portfolio, on Sunday said that the Karnataka government was firm on its stand to ban arrack. It will reduce Karnataka's revenue by Rs 1,900 crore per annum.

Speaking to reporters after participating in a function at Hubli, he said the government had begun the process of preparing the budget for 2007-08 and he had started consultations with senior officials and experts.

The DyCM indicated that the recommendations of the Dr D M Nanjundappa Committee on regional imbalance will be given priority in the next budget.

Stating that the government will plug leakages in tax collection to make up for the deficit caused by the ban on arrack. The decision to ban arrack followed repeated pleas from women's organisations, self-help groups and heads of various religious organisations. On the opposition from some quarters on the supply of eggs with the mid-day meal in schools, Yediyurappa said that it was a programme sponsored by the Centre and added that he would discuss it with the chief minister and take steps to provide fruit and milk instead of eggs.

The DyCM claimed that the government could provide funds for the schemes and programmes announced in the last budget due to a good recovery of taxes. "We expect a 14 per cent rise in the net revenue and it is a result of effective finance management. Last year, the net rise in the revenue was 6.5 per cent," he said.

Yediyurappa informed that Karnataka's revenues at the end of December last had touched Rs 16,778 crore and it was 29 per cent more than that of last year. The state has received Rs 658 crore as extra incentive from the Centre in addition to its regular share. The state has won appreciation from the Centre, Planning Commission and RBI for effectively managing financial resources. He claimed that the scheme to provide loans at 4 per cent to farmers was a major milestone and, other states and Centre were eager to know how Karnataka could manage it.

On the criticism from opposition leaders that the government was announcing sops without the financial sources, Yediyurappa reiterated that the government will stick to its decision on farmers' loan waiver. "We will collect Rs 30,000 crore from the land encroached in and around Bangalore and the same will be used for helping farmers," he asserted.

He admitted that the decision to waive the loan had proved counterproductive as the farmers were reluctant to repay loans.

Yediyurappa said that the government had released Rs 1 crore for developing Nrupatunga Hill in Hubli as a tourist spot. On the expansion of Hubli airport, he said that the government had accepted the proposal sent by the district administration to acquire 650 acres of land for the purpose.