Bengaluru: Earlier this week, the Siddaramaiah-led Congress government raised the Karnataka Sales Tax (KST) rate on diesel by Rs 2 per litre in an attempt to muster resources and bring in much-needed revenue to ease the state government’s financial crunch. This was the second such hike in the price of diesel in less than a year.
“With this hike, we expect around (an additional) Rs 2,100 crore in revenues annually,” a senior state government official told ThePrint, requesting anonymity.
Defending the latest hike and the one announced in June last year, the Karnataka government has said that despite the increase, “the revised sale price in the state will continue to be lower compared to the neighbouring states”.
The Siddaramaiah government, now in its second year, has resorted to hiking taxes on various commodities and services to mitigate the crunch of funds on account of its commitment to bankroll its flagship guarantees.
It is also considering, among other measures, issuance of fresh excise licences, keeping bars open for longer and opening more liquor stores to bring in additional revenue.
Earlier, the government increased duties on stamps & registrations and garbage cess in Bengaluru, besides hiking monthly fixed charges on power tariffs—which it says was a burden on itself. “Burden is on the state government because of Gruha Jyothi, almost 95 percent of all connections are getting free power up to 200 units. The other subsidy is that all farmer pumpsets are also getting free power,” said a second state government official.
The official added that hiked tax rate on diesel alone would generate additional revenue, while all other increase in tariffs would benefit farmers (milk) and consumers (electricity).
The Congress’s complaint about the state’s share in tax devolution adds to growing voices of discontent among non-BJP ruled states who have accused the Prime Minister Narendra Modi-led central government of trying to strip them of their powers with delimitation, ‘imposition of Hindi’ and other policies that they say threaten the identities of these states.
“Whatever has been budgeted, generally we end up with Rs 10,000-12,000 crore less. There is no problem with funds but just with our commitments and guarantees, we are really running a tight ship,” the second official quoted earlier said.
According to the state budget, Karnataka will borrow a staggering Rs 1.16 lakh crore in FY2025-26 as against Rs 1.05 lakh crore in FY2024-2025. As ThePrint reported earlier, as a result of higher borrowings, state’s liabilities are expected to surge to Rs 7.64 lakh crore as against Rs 6.65 lakh crore the previous fiscal, marking an increase of nearly 15 percent.
The Bharatiya Janata Party (BJP), the principal opposition in Karnataka, has launched a campaign against the rising cost of living in Bengaluru. In a post on X, Karnataka BJP likened Siddaramaiah to “Aurangzeb” and the hikes to the ‘jizyah’ tax.
Now, Kannadigas have to pay BBMP for parking their vehicle, which they own, in their own house!
What’s next? A surcharge on sunlight?
Just like Aurangzeb’s Jiziya tax burdened Hindus to fund his empire, Congress' Price Hike Sultan @siddaramaiah is looting Kannadigas with… pic.twitter.com/xYoKqDeuyG
— BJP Karnataka (@BJP4Karnataka) April 2, 2025
BJP ally Janata Dal (Secular) or JD(S) too criticised the government, though it kept away from protests organised by BJP workers in Bengaluru. Union Minister and JD(S) state president H.D. Kumaraswamy said the Congress government in Karnataka increased diesel prices by Rs 5 per litre in the last 10 months. He added that “as soon as people wake up in the morning, the Karnataka East India Congress Company slaps them with loot!”
🔺 Diesel price hiked by ₹2 per litre!!
Another shock for the people of Karnataka from the anti-people price-hike demon government!
The Karnataka Congress government has increased diesel prices by ₹5 per litre in the last ten months.
On Ugadi, the day of new beginnings,… pic.twitter.com/OTJGRptBtq
— ಹೆಚ್.ಡಿ.ಕುಮಾರಸ್ವಾಮಿ | H.D.Kumaraswamy (@hd_kumaraswamy) April 1, 2025
Karnataka’s Rural Development & Panchayat Raj (RDPR) Minister Priyank Kharge said Tuesday that BJP was finally talking about prices. He said prices of essential commodities, vegetarian meals, cooking oil, healthcare, ATM fees were going up under Modi.
ಕೊನೆಗೂ ಬಿಜೆಪಿಯವರು ಬೆಲೆ ಏರಿಕೆಯ ಬಗ್ಗೆ ಮಾತನಾಡುವ ಮನಸು ಮಾಡಿದ್ದು ಉತ್ತಮ ಬೆಳವಣಿಗೆ!
ಬಿಜೆಪಿಯವರು ಅಸಲಿಗೆ ಮಾತನಾಡಬೇಕಿರುವುದು ಜನಾಕ್ರೋಶ ಪ್ರತಿಭಟನೆ ನಡೆಸಬೇಕಿರುವುದು ಕೇಂದ್ರ ಸರ್ಕಾರದ ವಿರುದ್ಧ.
– ಕಳೆದ ಒಂದು ವರ್ಷದಲ್ಲಿ ಒಂದು ಸಾಮಾನ್ಯ ಸಸ್ಯಾಹಾರಿ ಊಟದ ಬೆಲೆ 57%ನಷ್ಟು ದುಬಾರಿಯಾಗಿದೆ.
– ತರಕಾರಿ ಹಾಗೂ ಬೇಳೆ ಕಾಳುಗಳು…
— Priyank Kharge / ಪ್ರಿಯಾಂಕ್ ಖರ್ಗೆ (@PriyankKharge) April 1, 2025
(Edited by Amrtansh Arora)
Also Read: Revenue streams stagnating, Siddaramaiah guarantees & dearth of central funds push up Karnataka debt