Karnataka chief minister BS Yeddyurappa imposed additional excise duties on Indian made foreign liquor (IMFL), beer and other low
alcohol beverages to net Rs 820 crore more excise in the coming year, while offering a further dose of reliefs, including lower VAT on various items and grants to various communities and organisations to the tune of roughly Rs 35 crore.

The chief minister asserted that he would take steps to ensure that the maximum retail price (MRP) on IMFL is not increased substantially. The retail sales margin is proposed to be reduced along with the revision of additional excise duties on IMFL to increase revenue.

Yeddyurappa had hinted at steps to net Rs 6,565 crore revenue from excise since revenue collection in 2008-09 was likely to reach the target of Rs 5,627 crore as a result of increase in IMFL consumption following the ban on arrack from July 2007.

Replying to the debate on the budget proposals for 2009-10, presented in the state assembly last Friday, Yeddyurappa announced waiver of VAT on Kannada software development; reduction of VAT on silipaulin plastic tarpaulin and converters of organic waste from the present 12.5% to 3%; hike in honorarium to the nearly 56,000 village accountants from the present Rs 2,000 to Rs 3,000; support price for arecanut at Rs 9,500 a quintal; and allocation of Rs 5 crore for taking up a lift irrigation project in Malavalli taluk.

The chief minister extended loans at 3% interest rate, currently offered to farmers availing crop loans from co-operative institutions and commercial banks, to the backward and numerically large Idiga community, which is predominant in Shimoga, Uttara Kannada, Dakshina Kannada and Udupi districts, ostensibly as assistance in view of the ban on arrack sale clamped during 2006-07.

He also offered grants to the tune of Rs 3 crore to Chalavadi community for construction of community buildings in Bangalore, Shimoga and Bidar districts besides a site in Bangalore. Sops of Rs 1 crore each have been announced for Kodavas, construction of Jagannathrao Joshi memorial at Nargund, Mogaveeras for a community building and math at Bennekudra in Barkur and Pandarapur yatri nivas construction in Maharashtra.

The grant of Rs 3 crore to the Arya Idiga Math in Solur in Magadi taluk, announced in the assembly, was reduced to Rs 1 crore in the council later, with the addition of Rs 1 crore to Datta Peetha in Bababudangiri in Chikmagalur district.

With the Kannada film industry celebrating its 75th year, the chief minister announced additional grant of Rs 2 crore for distribution as subsidy of Rs 10 lakh each to 50 Kannada films, Rs 1 crore from the Kannada film workers welfare trust, Rs 5 lakh subsidy to Kannada films winning national awards, besides annual grants of Rs 1 crore for celebrating Basava Utsav at Basavakalyan, a major pilgrim centre of Lingayats, Rs 50 lakh to Kuvempu foundation in Kuppalli for honouring the Jnanapith award winning Kannada writer from Vokkaliga community and Rs 20 lakh for organising cultural activities at Sanehalli in Chitraduga.

In his 90-minute reply, Yeddyurappa admitted that the shortfall in resource mobilisation for 2008-09 would be around Rs 3,000 crore with commercial taxes, excise and motor vehicle taxes contributing expected to exceed the target. He said the government was confident of exceeding 90% of plan expenditure for 2008-09 as 53.4% of expenditure had been achieved by the end of January.

He said the power situation would improve dramatically in the next five years as MoUs had been signed for projects that will expand capacity by 6,900 MW. Work on the pithead thermal power project in Chattisgarh is expected will commence next month. The proposed power projects together are expected to increase the generation capacity to 13,000 MW, he said claiming that the state would be in a comfortable position if 5000 MW generating capacity is added in the next five years.

The house approved the second instalment of supplementary estimates for 2008-09 , authorising payment and appropriation of Rs 6207.45 crore from the consolidated fund and voted payment and appropriation of Rs 21,259.14 crore from the consolidated fund of the state for the four months of the year 2009-10 up to July 31 by voice vote.