'Khata Khat Tax'? Congress Says Hikes Required To Fund Guarantees As Fuel Prices Increase In Karnataka

On 15 June, the Government of Karnataka issued a notification stating the increase in the sales tax on fuel — petrol and diesel, by Rs 3 and Rs 3.5 respectively.

The notification saw changes to the Karnataka Sales Tax Act, where the tax for petrol was increased from 25.92 per cent to 29.84 per cent and 14.34 per cent to 18.44 per cent for diesel.

While the opposition in the state, the Bharatiya Janata Party (BJP) and the Janata Dal (Secular) have criticised the move and threatened state-wide protests against the Chief Minister Siddaramaiah-led Congress government, some of the state ministers have defended the move and justified it.

Minister for Commerce and Industries, M B Patil, justified the move saying that the government needs money to fund the five guarantees in the state and bring in more development.

CM Siddaramaiah also defended the move by stating that the prices are comparatively lower in Karnataka and that similar-sized economies like Maharashtra have it costlier.

The opposition BJP and JD(S) have opposed the decision saying that essential commodities and public transport prices will also increase. "It is causing the rise in prices. The Modi government is trying to control the prices. But the Karnataka government has suddenly increased the prices, so the prices of essential commodities used in daily life will increase. They (the state government) should take it back," Union Minister Pralhad Joshi said. 

The BJP has also mentioned that the funds required for infrastructure development and payment of salaries will be affected. Last year, Deputy Chief Minister D K Shivakumar confirmed the same, when many MLAs complained about lack of funds for developmental activities. BJP Karnataka chief B Y Vijayendra threatened state-wide protests if the revised numbers were not rolled back.

He added that Siddaramaiah is not ready to admit to the poor fiscal condition of the state, but the recent hike in fuel prices confirms it. The BJP is also dubbing this as 'revenge' on voters as the NDA won 19 of the 28 Lok Sabha seats in the state and are calling it 'Khata Khat Tax' — a term frequently used by Congress leader Rahul Gandhi.

This financial year, the Congress government set aside Rs 52,009 crore to fund the five guarantees which include free electricity, monthly assistance to women, free ration (rice), a stipend for unemployed youth and free public transport (intra-state and city buses) for women.

Apart from the increase in fuel prices, the Karnataka government also increased the fee for engineering courses in private colleges by ten per cent. Electricity prices were increased by Rs 2.89 the day after 200 units of free electricity was announced by the government in the state.

The BJP has also called out the Congress for hiking stamp duty prices up to 500 per cent and increasing the lifetime tax on high-end EVs. Apart from the above, the Karnataka government also increased the milk prices by three rupees in order to "help the farmers."