Bengaluru  : Petrol, diesel and Indian Made Liquor (IML) will get costlier as the Karnataka government has proposed higher taxes in the state Budget 2016-17, which focuses on development of agriculture and rural areas as well as the Capital city.

The Motor Vehicles Tax has also been raised at different rates to mop up Rs 121 crore.

Presenting the budget in the Assembly, Chief Minister Siddarmaiah, who holds the Finance portfolio, also raised the Value Added Tax from 14.5 per cent to 20 per cent on aerated and carbonated non-alcholic beverages.

Hikes in rate of tax on petrol and diesel, additional excise duty across 17 slabs on IML and Motor Vehicles Tax have been proposed in the Budget.

The budget, Siddaramaiah’s fourth as Chief Minister and 11th in his political career, also gave a big thrust to infrastructure development in Bengaluru to address the woes of the country’s IT hub.

Tax exemption has been retained on paddy, rice, wheat, pulses and products of rice and wheat for one more year.

He also exempted VAT on processed ragi, Jowar Roti, native food of north Karnataka and Ragi Roti, native food of south Karnataka, aluminium household utensils, barring pressure cooker and cutlery, and handmade paper and paper boards.

Noting that Karnataka had not raised the tax on diesel and petrol in the middle of the year and passed on the benefits of fall in international crude oil prices, he proposed hike in tax rate on petrol from 26 per cent to 30 per cent and diesel from 16.65 per cent to 19 per cent.

This would increase the price of petrol by Rs 1.89 per litre and diesel by 98 paise per litre, he said, adding that the measure was being taken keeping the state resources in mind for the welfare needs.

Siddaramaiah also increased the Entertainment Tax from 6 per cent to 10 per cent on Multi System Operators and Direct to Home service providers considering “rapid changes over the years in the field”.

Meeting the long standing demand of growers of coffee, tea, rubber and other plantation crops, he abolished Agricultural Income Tax.

In the budgetary proposals, the government also decided to continue the scheme of disbursing short term agricultural loans up to Rs 3 lakh at zero interest rate and medium and long term agricultural loans up to Rs 10 lakh at 3 per cent interest.

It targets disbursing Rs 11,000 crore as agricultural loans to 23 lakh farmers during 2016-17.

For Bengaluru, Siddaramaiah announced Rs 5,000 crore as Chief Minister’s special package, including developing roads of 1,500 km to provide alternative routes within the road network and all round development of IT-BT hubs in the city.

He sought a Vote on Account for the expenditure up to July 31, 2016. VAT rates have also been reduced from 14.5 to 5.5 per cent on set top boxes for viewing TV content, multi-media speakers, helmets, LED bulbs, adult diapers to help senior citizens, office files made of paper and paper boards and surgical gowns, masks and caps and drapes of single use made of non-woven fabrics.

The Excise Duty on IML has been proposed to be increased from Rs 45 to 50 and Excise Duty on beer from Rs 5 to Rs 10. Also, Additional Excise Duty on beer has been raised from 135 to 150 per cent. It is also proposed to levy an administrative fee of Rs 2 per litre on export and Rs one a litre on import of spirit, excluding ethanol.

On the Motor Vehicles Tax front, the levy has been raised on private stage carriage vehicles from Rs 600 to Rs 900 per seat, private city service stage carriage from Rs 300 to Rs 450 per seat, contract carriages from Rs 1,000 to Rs 1,500 per seat and all India tourist omni buses from Rs 2,750 to Rs 3,500 per seat.

Considering that electric vehicles are eco-friendly, they have been fully exempt from payment of taxes.

Siddaramaiah said the government has decided to “add sheen” to the “charisma of Brand Bengaluru”, known as the country’s IT capital and Startup Capital.

He said Rs 500 crore for solid waste management, Rs 100 crore for lake development, effective traffic management and development of three major markets of heritage value are proposed for Bengaluru.

In addition to Rs 1,000 crore under “Nagarothana plan”, Rs 2,158 crore under Special Investment Plan and Rs. 1064.73 crore through Finance Commission and other grants, Rs 4,222.73 crore was being provided to Bengaluru civic body, he said.

The budget noted that the Gross State Domestic Product in 2015-16 grew at 6.2 per cent as against 7.8 per cent during 2014-15, which was attributable to decline in growth in agriculture sector.

Siddharamaiah announced formation of “Karnataka State Agricultural and Farmers Committee” under his chairmanship to redress grievances of farmers and converge schemes of agriculture and other departments.

One hundred villages in four districts across four revenue divisions would be developed as model agricultural villages under the “Suvarna Krishi Grama’ programme, he said.

The government will implement “Karnataka Raitha Suraksha Pradhan Mantri Fasal Bima Yojana” to help farmers during crop loss, for which the state would provide Rs 675.38 crore as its share.

The government would also open up opportunities for private agricultural universities and agricultural colleges, he said.

Siddaramaiah said for the first time in the country, 103 primary agricultural markets had been connected on an electronic platform to Unified Market System, through which agricultural commodities amounting to Rs 17,500 crore had been transacted from February 2014 till date.

The system would be extended to other markets also in a phased manner. He also announced “Indira Suraksha” Scheme to provide integrated healthcare services to the families of farmers who commit suicide.

To promote industries in the state, a non-profit company “Invest Karnataka” will be formed with industrialists and government officials on its board, to be managed by professionals, Siddaramaiah said.

On the IT and BT sectors, the budget proposed setting up of four technology business incubators in potential areas of Internet of Things, electronics systems design and manufacturing, robotics, 3D printing, nanotechnology, medical devices, health technology and clean technology in phases across the state.