Revenue generation in state set to shrug off note-ban impact

Bengaluru, Feb 18: Exactly 100 days after Prime Minister Narendra Modi demonetised high-denomination banknotes, the apprehension that the decision will severely impact Karnataka’s revenue collections seems to have subsided.

Feedback being obtained by Chief Minister Siddaramaiah, who also holds the finance portfolio, indicates that except for stamps and registration, the other three revenue-generating departments — commercial taxes, state excise and transport — will meet their budgetary target for 2016-17. In December, the government had anticipated a shortfall of Rs 3,000 crore by the end of the current fiscal year. But that is proving to be unfounded.

On Thursday, Siddaramaiah started holding pre-budget interactive meetings with trade associations, farmers and other stakeholders. Sources in the Finance Department said the Commercial Taxes Department, Karnataka’s largest revenue generator, would not only meet its budgetary target of Rs 51,338 crore but also register a 13%?growth. Similarly, the Excise Department will meet its target. The sources said demonetisation did not impact these departments as all the remittances were made by traders electronically. The sale of products and liquor did not see much of a decline and does not involve high-value transactions.

The Transport Department did take a hit, but the collections are improving now. As regards property registrations, the decline in revenue had begun by the end of October — much before demonetisation — as the government’s drive against encroachments on stormwater drains in Bengaluru hit the sale of apartments in a big way.

Siddaramaiah will present his 12th budget (a record in the state) on March 17 and it is largely expected to be a populist one. This will be the Congress government’s last full-fledged budget before the Assembly elections next year. Siddaramaiah is expected to announce some succour to farmers, who are reeling under severe drought, welfare schemes for Ahinda communities (Kannada acronym for OBCs,?Dalits and minorities) as in the previous years and hike the quantity of foodgrains under the Anna Bhagya scheme and milk to schoolchildren five days a week.

Wishlist given to CM on Friday

Federation of Karnataka Chambers of Commerce and Industry

n Abolition of trade licence should be applicable to all business sectors.

n Allot up to 2 acres of industrial land to micro and small enterprises on lease-cum-sale basis.

n Develop Bengaluru as a mega city.

n Reduce Agriculture Produce Marketing Centre (APMC) cess from 1.5% to 0.5%.

n Promote e-wallets for digital transactions.

Karnataka Small Scale Industries Association (Kassia)

Set up a separate directorate for micro and small enterprises.

Set up more industrial townships.

Provide loans at concessional rates of interest to women enterprises.

Provide houses to industrial workers.

Karnataka Film Chamber of Commerce

Cap movie tickets in multiplexes at Rs 150.

Reserve 50%?of shows in multiplexes for Kannada films.

Don’t impose advertisement tax on banners and posters displayed inside cinema halls.

Develop a layout near Mysuru for people from film fraternity.

Karnataka Pradesh Hotel and Restaurants Association

Reduce VAT on food items served in hotels from

4.5% to 2%.

Set up exhibition centres in Mysuru and Hubballi on the lines of Bangalore International Exhibition Centre.