Karnataka budget for 2009-2010 - election friendly?

In a recession-hit year, Yeddyurappa, who also holds the finance portfolio, presented the budget which has a deficit of Rs 43.08 crore, but hoped to collect an additional revenue of Rs 1,149 crore in 2009-10. He intended to increase the plan size to Rs 29,500 crore, up by Rs 3,548 crore compared with 2008-09. At the same time, he revealed that the revenue collection from the State’s own resources for the current fiscal had failed to reach the target by Rs 3,111 crore.

The chief minister did not announce any stimulus package to revive the economy. However, he desisted from going in for significant upward tax revision under any head. To give a breather to the real estate market, Yeddyurappa intended to reduce stamp duty from 7.5 per cent to 6 per cent. Besides, he met the demand of the housing sector by introducing the much-needed reforms like introducing slab system for collection of stamp duty on property lease.

In case of commercial taxes, which witnessed a negative growth of Rs 1,749 crore as compared with the estimate, the chief minister continued exemption of VAT on paddy, rice, wheat and pulses for one more year. In order to encourage travel and spending, he slashed luxury tax on hotel room rents, besides entertainment tax on cinema tickets.

But outside Bangalore, the budget earmarked Rs 100 crore for construction of airports in Gulbarga, Bijapur, Shimoga, Hubli, Bellary and Mysore cities. Yet, there was no mention of proposed airports in Hassan, Bidar, Karwar and Mangalore.

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