Chief minister Siddaramaiah is all set to present his 11th budget on Friday, and the most expectant are the industries and trade bodies who are hoping that he will give them sops to boost the state's economy. They are hoping against hope that the CM would on priority keep his promise to allocate funds for infrastructure in Bengaluru, a concern raised by several industry captains at the recent Invest Karnataka meet, as it contributes 70% of the state revenue.
BT Manohar, chairman, State Taxes Committee, FKCCI, said the government has been introducing and implementing e-initiatives to ease the process of doing business and for higher growth of tax revenue. "As these have yielded positive results, we want to see the government augment such initiatives and consider reducing tax rates," he added.
The industry is also looking forward to reduction in value added tax (VAT) and luxury tax to promote tourism in Karnataka. Officials who are part of the budget preparation indicated that the CM may consider this demand.
Manohar said the neighbouring states of Telangana, Andhra Pradesh, Maharashtra, Kerala, Tamil Nadu and Goa have been charging only 5% VAT on electronic and other goods compared to 14.5 %, irrespective of the value. "So we are hoping the Siddaramaiah government will bring it on par with other states, which in turn, will boost revenue and contribute to the state exchequer,'' he added.
Trade activist Sajjan Raj Mehta said they are hoping the government will remove the additional 0.5 % VAT levied (by the previous BJP government) to tackle drought in the state. He said small-scale industries and the garment sector are banking on tax concession and relaxation of rules to ensure they can compete with the burgeoning online trade.
The industries are also hoping for clear-cut plans on acquisition of land, which has become a major stumbling block for expansion and setting up new units in the state, particularly in and around Bengaluru.