The much-touted first budget of the newly-formed Janata Dal(S)-Congress coalition in Karnataka presented by Chief Minister HD Kumaraswamy on Thursday revolves around the waiver of farm loans that was his prime election promise.
Despite the fact that a partial waiver of farm loans had been announced by the erstwhile Congress government in February last, Kumaraswamy stuck to the unabashed wooing of this vital vote bank at the cost of other sections of the population.
The latest loan waiver scheme would involve a whopping expenditure of Rs 34,000 crore and the whole concentration in the budget is on how to raise resources to meet that burden.
Kumaraswamy announced a farm loan waiver of up to Rs 2 lakh for those who have defaulted and of Rs 25,000 for those who have running accounts. However, the loan waiver will be in effect for only those farmers who have taken loans from nationalised or cooperative banks and have defaulted on payments to banks up to December 31, 2017.
Besides, even this waiver will be done in a phased manner with the amount earmarked this year being Rs 6,500 crore.
To keep the Congress in good humour, Kumaraswamy also announced that the predecessor Siddaramaiah regime’s welfare schemes announced four months ago, most of them as sops to voters in the recent Assembly elections, would not be scrapped. That imposes a virtually impossible tight-rope walk for Kumaraswamy in which he may either end up inadequately fulfilling the farmers’ demand or in curtailing the expense on Siddaramaiah’s welfare schemes.
A whole host of taxes has been proposed on the urbanites to attempt to keep the fiscal deficit in check. To name a few, a cess of Rs 1.4 a litre has been proposed on petrol, Rs 1.12 per litre for diesel, the excise duty on liquor has been hiked by four per cent and electricity tariff has been raised by 20 paise a unit. It is not as though these would affect only those in the urban areas but their effect on the urban sector would be greater.
While Kumaraswamy has promised austerity measures to cut government spending and to tap huge volume of funds lying unutilised under various governmental schemes, with a coalition that is loosely-knit and expected to be lacking in proper accountability, that may be a herculean task. Many ministers would predictably be looking to line their pockets, making hay while the sun shines.
The finance minister has also proposed a hike in road tax which is already high in Karnataka. But there is a boost for road-users in Bengaluru in so far as six elevated corridors have been provided for at a cost of nearly Rs 16,000 crore which will be inter-linked.
There is a resolve expressed in the budget speech for controlling the ‘garbage mafia’ which has been running riot in Bengaluru making garbage removal a major challenge. But no ‘mafia’ gives in easily and there are invariably political bigwigs mixed up with them. Combating them would be no mean task.
Managing the contradictions in the coalition would be a herculean job for Kumaraswamy who shocked people by his assertion recently that he was surviving in office at the mercy of the Congress.
A recently-leaked video of Siddaramaiah’s closed-door meeting with some of his party’s legislators in which he hinted that he would see the back of Kumaraswamy after the Lok Sabha elections is a warning to the JD-S that the Congress is only playing along for a while.
The Congress is indeed wary of Kumaraswamy, who is systematically building up his vote banks. All in all, a battle of wits lies ahead and whatever he may claim, Kumaraswamy is not sold out to the Congress. He is an opportunist to the core who can change his spots like a leopard.