Hyderabad: Kiran Kumar Reddy completed one year in office on Friday with a dubious distinction in these times of high inflation: he has levied or planning to levy additional imposts of Rs 10,635 crore a year on the general public during his tenure. However, this has gone largely unnoticed thanks to the Telangana problem which has dominated the public discourse. Of this aggregate amount, levies of an additional Rs 6,650 crore have already been slapped on the hapless consumers. Proposals for a remaining Rs 3,985 crore has been cleared by the government though its implementation is pending.
The additional taxes that the general public are now bearing is across the spectrum and not limited to specific sectors. This includes Rs 1,100 crore annually in the form of hike in power tariff affectingall consumers (of 300 units or more) except farmers, hike in APSRTC bus fares that is burdening bus travelers by a whopping Rs 800 crore per year, increase in value added tax of over 3,000 household items from 4 to 5% that is picking the pockets of consumers to the tune of Rs 2,500 crore per year, hike in property tax in municipal areas that is setting property owners back by Rs 1,000 crore annually, and a hike in land rates and land registration rates leading to an additional impost of Rs 1,000 crore annually.
Apart from these, there were hikes in taxes on cinema tickets, as well as an increase in water tariff in Hyderabad that is setting consumers back by Rs 250 crore annually. In addition to these, three proposals have already been cleared by the state government. These include an additional burden of Rs 1,485 crore on the power consumers in the form of fuel surcharge, a 30% increase in VAT on Indian Made Foreign Liquor (IMFL) that will force tipplers to shell out an additional Rs 1,500 crore annually, and an increase on life tax from the existing 12% to 16 % that will tax vehicle owners across the board to the tune of Rs 1,000 crore. If these three proposals are taken into account, the total amount that the Kiran regime has slapped on the state residents in this fiscal alone would amount to a staggering Rs 10,635 crore.
In sharp contrast, the new welfare schemes launched by Kiran Kumar during his tenure will give the poor benefits worth only a meager Rs 300 crore. Of this, Rs 200 is to be spent on the Re 1-a-kilo rice scheme for the poor and another Rs 100 crore on Rajiv Yuva Kiranalu. “The Telangana issue has dominated the public discourse along with the corruption cases so Kiran’s moves have not really attracted public ire. But for how long it remains to be seen,” confessed a senior official of the government. It is noteworthy that the Kiran moves come even as hikes in the prices of petrol, diesel and LPG has broken the back of consumers nation wide. Analysts pointed out that Chandrababu Naidu riding high in his second term began to lose ground in 2001, after effecting a hike in the power tariff that led to an additional impost of about Rs 250 crore annually to the residents of the state. Economists said that the chief minister could have also provided some relief to the state residents by absorbing some of the hike in the prices of petrol, diesel and LPG effected by the state early this year. His predecessor Y S Rajasekhara Reddy had done it by absorbing Rs 50 of the Rs 100 hike effected by the Centre a few years ago.
Government sources pointed out that even after these additional imposts, the financial position of the state government is not showing any improvement “At this rate, if the financial situation of the state does not improve by the beginning of the next fiscal, be prepared for more taxes,” these sources portended ominously. Politically however Kiran is doing better than how he was doing at the beginning. Analysts say that he is here to stay till the next elections.
TAXING
KIRAN
Power Tariff 1000 cr APSRTC Fare 800 crVAT 2500 cr Property Tax 1000 cr Land Registration 1000cr Water Tariff 250 cr
The additional taxes that the general public are now bearing is across the spectrum and not limited to specific sectors. This includes Rs 1,100 crore annually in the form of hike in power tariff affectingall consumers (of 300 units or more) except farmers, hike in APSRTC bus fares that is burdening bus travelers by a whopping Rs 800 crore per year, increase in value added tax of over 3,000 household items from 4 to 5% that is picking the pockets of consumers to the tune of Rs 2,500 crore per year, hike in property tax in municipal areas that is setting property owners back by Rs 1,000 crore annually, and a hike in land rates and land registration rates leading to an additional impost of Rs 1,000 crore annually.
Apart from these, there were hikes in taxes on cinema tickets, as well as an increase in water tariff in Hyderabad that is setting consumers back by Rs 250 crore annually. In addition to these, three proposals have already been cleared by the state government. These include an additional burden of Rs 1,485 crore on the power consumers in the form of fuel surcharge, a 30% increase in VAT on Indian Made Foreign Liquor (IMFL) that will force tipplers to shell out an additional Rs 1,500 crore annually, and an increase on life tax from the existing 12% to 16 % that will tax vehicle owners across the board to the tune of Rs 1,000 crore. If these three proposals are taken into account, the total amount that the Kiran regime has slapped on the state residents in this fiscal alone would amount to a staggering Rs 10,635 crore.
In sharp contrast, the new welfare schemes launched by Kiran Kumar during his tenure will give the poor benefits worth only a meager Rs 300 crore. Of this, Rs 200 is to be spent on the Re 1-a-kilo rice scheme for the poor and another Rs 100 crore on Rajiv Yuva Kiranalu. “The Telangana issue has dominated the public discourse along with the corruption cases so Kiran’s moves have not really attracted public ire. But for how long it remains to be seen,” confessed a senior official of the government. It is noteworthy that the Kiran moves come even as hikes in the prices of petrol, diesel and LPG has broken the back of consumers nation wide. Analysts pointed out that Chandrababu Naidu riding high in his second term began to lose ground in 2001, after effecting a hike in the power tariff that led to an additional impost of about Rs 250 crore annually to the residents of the state. Economists said that the chief minister could have also provided some relief to the state residents by absorbing some of the hike in the prices of petrol, diesel and LPG effected by the state early this year. His predecessor Y S Rajasekhara Reddy had done it by absorbing Rs 50 of the Rs 100 hike effected by the Centre a few years ago.
Government sources pointed out that even after these additional imposts, the financial position of the state government is not showing any improvement “At this rate, if the financial situation of the state does not improve by the beginning of the next fiscal, be prepared for more taxes,” these sources portended ominously. Politically however Kiran is doing better than how he was doing at the beginning. Analysts say that he is here to stay till the next elections.
TAXING
KIRAN
Power Tariff 1000 cr APSRTC Fare 800 crVAT 2500 cr Property Tax 1000 cr Land Registration 1000cr Water Tariff 250 cr
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