Bangalore, Mar 21 - Karnataka government today presented the Budget that exceeded Rs 1 lakh crore in value for the first time and announced the acceptance of pay commission recommendations bringing cheer to employees.

It also proposed to levy value added tax (VAT) at five per cent on beedies and plastic woven fabrics and increase VAT on cigarettes and other tobacco products from 15 per cent to 17 per cent.

Besides, the government has proposed to reduce the stamp duty from six per cent to five per cent on conveyance/sale deeds which, the government said, would facilitate the registering public and would also trigger development in the construction industry.

"...this budget facilitates a total expenditure of Rs 1,02,742 crore on various development activities and regulatory functions of the Government, which is an increase of 20.42 per cent over the Budget of Rs 85,319 crore in 2011-12", Chief Minister D V Sadananda Gowda said in the Legislative Assembly.

"This is the first time the Budget size has exceeded Rs 1 lakh crore", he pointed out. Revenue surplus is estimated to be Rs 931 crore. Fiscal deficit is expected to be Rs 15,312 crore, which is 2.94 per cent of the GSDP.

Recommendations of the official pay committee for government employees would be given effect from April 1, Gowda said, adding that the existing dearness allowances and installment due as on January 1 this year would be merged in the basic pay and pension along with 22.5 per cent increase.

"The total additional outgo on account of the pay and pension revision is estimated to be Rs 4,450 crore on a full year basis", said Gowda, who also holds the Finance portfolio, as he the sought approval for vote on account for the expenditure during the period up to July 31 this year.

he government proposed to reduce sales tax on diesel by 1.25 per cent, from 18 per cent to 16.75 per cent, and also exempt partnership firms from agricultural income tax.

Motor cabs which cost more than Rs 10 lakh would be levied life time tax at the rate of 15 per cent of the cost of the vehicle, Gowda said, adding, with this revision and better collection efficiency, it is proposed to collect Rs 3,350 crore of motor vehicle taxes during 2012-13.

Tax on jewellery and articles of gold and other noble metals, precious and semi-precious stones would be reduced from two per cent to one per cent, while tax on naphtha from 14 per cent to five per cent.

Total outlay for welfare of backward classes has been increased to Rs 1,000 crore for 2012-13 from Rs 760 crore in the previous fiscal.

Loans up to Rs 25,000 given for agriculture and related activities by Scheduled Caste Development Corporation and Scheduled Tribe Development Corporation up to 2005-06 and remaining outstanding till now would be waived along with interest.

A legislation would be enacted making it mandatory for the MBBS undergraduates and post-graduates to serve one year in rural areas immediately after successful completion of the course. "Only thereafter they will be made eligible for permanent registration with the Karnataka Medical Council", the Chief Minister added.

Special subsidy for children films would be enhanced to Rs 4 lakh from the existing Rs 2 lakh.

As part of 150th birth anniversary celebrations of Swami Vivekananda, a laser technology-based fountain display would be constructed in Mysore on the lines of Lumbini Garden in Hyderabad, at a cost of Rs 7 crore.

Gowda announced that three SSLC toppers from Government schools in each block would be given computers. PTI