Government Hikes: Ordinary Citizens Bear the Brunt in Karnataka
With a series of tax and price hikes, the Karnataka government is placing a significant financial burden on ordinary citizens. From fuel and liquor to milk and water, the costs are rising, while the government contemplates more increases in property tax,
Karnataka GovernmentTax HikesWelfare SchemesProperty TaxWater TariffsReal Estate NewsJan 01, 2025
The Siddaramaiah government, which came to power with a set of welfare promises, is now implementing a series of tax and price hikes that are hitting the common man hard.
Recent indications suggest that the government is planning to raise milk prices, water and electricity tariffs, bus fares, and property tax, adding to the already growing financial strain on ordinary citizens.
After the Lok Sabha elections concluded on June 4 last year, the government delivered its first blow by increasing sales tax on fuel.
This move pushed the prices of petrol and diesel up by Rs 3.
In the past two years, the state has raised alcohol prices twice and is even proposing a heavy tax on beer, making Karnataka’s liquor prices the highest in south India.
Critics argue that these measures are aimed at funding the government’s ambitious welfare schemes, including Anna Bhagya (free foodgrains), Gruha Jyoti (free power up to 200 units), Gruhalakshmi (Rs 2,000 for women), Shakti (free bus rides for women), and Yuva Nidhi (for unemployed youths).
Together, these schemes cost the government over Rs 63,000 crore annually.
In early 2024, the government made a significant hike in property registration costs, with a 200-500 percent increase in stamp duty.
This move came as Bengaluru’s real estate sector was rapidly expanding, and the government is now looking to raise property tax to further boost its coffers.
While a power tariff hike is on the horizon, it’s worth noting that a rate cut last year had benefited consumers.
Deputy Chief Minister D K Shivakumar has announced that water prices in Bengaluru will increase by 20-30 percent, an increase that is deemed necessary after 12 years to secure a Rs 3,500 crore World Bank loan for flood management and urban infrastructure projects.
A Rs 5 increase in milk prices will also impact the common citizen significantly.
If bus fares are raised, it could mean that male passengers will end up subsidizing the free rides for women, a move that could alienate urban voters.
Instead of burdening ordinary citizens, the government should consider tapping into the IT companies that benefit from tax holidays, duty-free imports, and cheap land.
These companies have enjoyed substantial advantages for years, and it’s time for them to contribute more to the state’s coffers.
Siddaramaiah, known for his financial expertise, needs to streamline the welfare schemes and strike a balance between political promises and economic sustainability.
If his governance model is to succeed, it must address the financial pressures faced by ordinary citizens while ensuring that those who have benefited the most from government largesse contribute their fair share.
Frequently Asked Questions
What are the main welfare schemes introduced by the Karnataka government?
The main welfare schemes include Anna Bhagya (free foodgrains), Gruha Jyoti (free power up to 200 units), Gruhalakshmi (Rs 2,000 for women), Shakti (free bus rides for women), and Yuva Nidhi (for unemployed youths).
How much will water prices increase in Bengaluru and why?
Water prices in Bengaluru will increase by 20-30 percent to secure a Rs 3,500 crore World Bank loan for flood management and urban infrastructure projects.
What is the cost of the welfare schemes implemented by the Karnataka government?
The welfare schemes implemented by the Karnataka government cost over Rs 63,000 crore annually.
What are the proposed tax and price hikes in Karnataka?
The proposed hikes include increases in milk prices, water and electricity tariffs, bus fares, and property tax.
How has the IT industry benefited from the Karnataka government?
The IT industry has benefited from tax holidays, duty-free imports, and cheap land in special economic zones.
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