I rise to
present the Budget for the year 2003-04.
The vision spelt out in the first budget of my Government was translated into various
initiatives and it has been my endeavour to bring all of them to fruition. This budget
reflects my continuing commitment to the programmes initiated in earlier budgets and at
the same time, spells out a number of major initiatives to respond to the needs of our
people. I take pride in the fact that my Government has shown strong resilience in dealing
with the many challenges and constraints in the last three years. The State and its people
have been through a difficult year. Karnataka suffered a second consecutive drought. 157
talukas in 24 districts were affected.
To mitigate the grave situation, my Government spent over Rs 50 crore, for drought relief
operations in addition to releases made under the Calamity Relief Fund and the National
Calamity Contingency Fund. As a part of the relief measures, my Government is
committed to waive the interest on short term co-operative credit for Kharif 2002. The
Government of India has agreed to bear only 20 per cent of this burden. I propose to bear
the rest with contributions from the Legislators Area Development Fund and the National
Calamity Contingency Fund.
My effort in this year’s budget is to achieve three objectives: First, to try and
provide a citizen friendly tax regime and some relief in the burden of taxes to the common
man; Second, effectively reduce unproductive revenue expenditure to release resources for
development; Third, to prioritise development expenditure and enhance allocations to
Agriculture, Rural Development, Education and for Empowerment of women and the
under-privileged.
Economic situation: Advance estimates of Karnataka’s Gross Domestic Product (GSDP)
indicate a growth rate of 8.3 per cent at current prices. While Industry and Services are
estimated to have grown at the rates of 8.9 per cent and 13.7 per cent respectively, the
agriculture sector recorded a negative growth rate of 3.6 per cent. This was largely due
to the severe drought that I have already referred to.
The inflationary pressures have eased to an extent due to the low growth in the economy.
The wholesale price index for all commodities is estimated to have increased at the rate
of 3.46 per cent from March to October 2002, marginally higher than for the same period in
2001. The Consumer Price Indices of Karnataka when compared with the All-India average.
The economic outlook for 2003-04 is however positive. Following two consecutive droughts
it would be reasonable to anticipate a good monsoon in the ensuing year. Though the MTFP
projects a real growth of close to 8 per cent, in GSDP, it would be realistic to target a
growth rate of about 6 per cent.
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Agriculture remains at the heart of the economy of the State. It also has
a considerable weight in the composition of the State’s GSDP. It would be axiomatic
therefore that rapid economic growth for Karnataka would be substantially predicated upon
agriculture and allied activities.
To promote efficient micro water management, a scheme for extensive use of drip irrigation
is necessary. To enable farmers to rapidly adopt drip irrigation as the dominant mode of
water management in the State, my Government will provide a capital subsidy of 50 per cent
to all farmers and 100 per cent subsidy to all SC/ST beneficiaries under the Ganga Kalyana
Scheme on purchase of drip irrigation and sprinkler irrigation equipment and on water guns
used in agriculture.
Recognising the importance of farm mechanisation, I propose to increase the subsidy from
25 per cent to 50 per cent for purchase of farm machinery including tractor mounted plant
protection equipment, power tillers and solar water pumps. This will help timely
completion of agricultural operations, overcoming labour shortage during times of peak
seasonal operations and help reduce the cost of inputs.
Members are aware that Bijapur District is known for its potential for horticulture
development. In order to give impetus to development of horticulture in this area, I
propose to increase the subsidy for drip and sprinkler irrigation equipment to 100 per
cent for horticultural crops in this district.
Through the market intervention scheme, the state has been able to prevent distress sale
by farmers. The revolving fund for market support operations is at present Rs 100 crore
and the turnover has been approximately Rs 200 crore. I propose to earmark an additional
Rs 100 crore during the fiscal year 2003-04. In order to mobilise resources for the
revolving fund, the market cess will be increased from 1 per cent to 1.5 per cent. With
this the corpus of the revolving fund will reach Rs 200 crore. That should enable us to
handle market support operations up to a turnover of Rs 500 crore.
In order to ensure that farmers throughout the state are freed from the clutches of middle
men, I propose to establish “Raithara Santhe” in all the taluka headquarters.
Promoting organic farming is a major priority of my Government. To encourage farmers to
adopt organic farming on a large scale, I propose to increase subsidy in organic manures
like compost, vermicompost and bio-fertilizers from 25 per cent to 50 per cent. I am
allocating Rs 2 crore for this purpose.
The Government has been extending waiver of sales tax on diesel supplied to mechanised
fishing boats limited to 50,000 KL per year. This exemption is in the nature of a subsidy
of Rs 16 crore per annum. Though such tax exemptions are not compatible with the tax
reforms being implemented, keeping the difficulties that the fishermen community faces, I
propose to continue this scheme during the year 2003-04.
With the objective of building a vast pool of qualified veterinary doctors in the State, I
am happy to announce the establishment of a University of Veterinary Sciences in Bidar. I
am setting apart Rs 5 crore for this purpose.
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