Karnataka plans special tax to raise flood relief funds


Bangalore: The cash-strapped Karnataka government plans to impose a special tax to raise additional funds for rehabilitating the flood-affected people in the state’s northern districts, Home Minister V.S. Acharya said late Sunday.

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“The cabinet discussed the tax proposal raised by the chief minister (B.S. Yeddyurappa) at an all-party meeting earlier in the day. A finance committee will be set up soon to finalise the proposal keeping in view the state’s finances,” Acharya told reporters after an emergency cabinet meeting at the state secretariat here.

As the per the National Calamity Contingency Fund (NCCF) and the Calamity Relief Fund (NRF) norms, the state government is bound to contribute 25 percent matching amount to the 75 percent grant from the central government.

Clarifying that no decision was taken at the hour-long cabinet meeting on the tax proposal, Acharya said though the state’s financial health was a shade better than that of other states, the collections were subdued in the first half of this fiscal due to economic slowdown.

“Scope to levy taxes is limited at the state level. We have to weigh pros and cons of such a measure, as we do not want to burden the people when they are facing hardships due to slowdown and price rise. The committee will decide on which sections of society can be levied or spared to meet the unforeseen requirement,” Acharya pointed out.

Earlier, the chief minister told the all-party meeting that the proposed tax would be operational for a year to raise enough resources to fund the relief and rehabilitation schemes in the 15 districts worst affected by heavy rains and flash floods during Sep 29-Oct 2 period.

“Our first priority is to build about 100,000 houses to shelter the flood-hit people whose homes collapsed or were washed away in the rains and floods,” Yeddyurappa said at the two-hour long meeting.

The state government also plans to acquire 4,000-5,000 acres of land to build the houses and shift people living in 217 villages in low-laying areas and on the banks of rivers to higher plains.

“We will invoke the emergency clause of the Land Acquisition Act, if necessary, to prevent delays in acquiring the lands. Deputy commissioners in the affected districts will identity the lands for building the houses,” the chief minister said.

Expressing hope that the central government would assist the state in the relief and rehab work by releasing more funds under the NCCF and CRF, Yeddyurappa said he had sought an interim relief of Rs.10,000 crore under the NCCF, as the devastation was estimated to be about Rs.20,000 crore.

“We have sought Rs.16,500 crore from the central government under the NCCF and CRF, as this is the first time that more than half the districts in the state were affected by a natural disaster of this magnitude,” the chief minister said.

Prime Minister Manmohan Singh Saturday announced an interim relief of Rs.1,000 crore to Karnataka to expedite the relief measures and assured the state government that funds would not be a constraint in rehabilitating the affected people.

Opposition parties, led by the Congress and the Janata Dal-Secular (JD-S), pledged full support to the Bharatiya Janata Party (BJP) government in restoring normalcy in the affected districts of the state.