Big Setback for Sidda Govt: Karnataka Temple Tax Proposal Defeated

Bengaluru: In a setback for the Siddaramaiah-led Congress government in Karnataka, a bill that mandated a 10 per cent tax on cash-rich Hindu temples was defeated in the state legislative council late last evening.

The move comes two days after the bill was passed in the state assembly, mandating the state government to collect taxes from temples that have revenues of more than Rs 1 crore.

What the Bill Stated

The proposal was a part of the state government’s  ‘Karnataka Hindu Religious Institutions and Charitable Endowments Bill 2024’, mandating the state government to charge 10 per cent tax from temples generating revenue exceeding Rs 1 crore and 5 per cent from shrines with revenue of between Rs 10 lakh and Rs 1 crore.

The bill also sought the creation of state-level and district-level committees to "scrutinize, review and submit" proposals on infrastructure development for pilgrims.

The bill sparked a huge controversy in Karnataka, with the opposition BJP alleging that the Siddaramaiah dispensation is indulged in rolling out "anti-Hindu" policies.

After the bill was cleared in the lower house of the state, former Chief Minister and BJP veteran BS Yediyurappa questioned why only Hindu temples are being subjected to the scrutiny and not the incomes of other religions.

Amid criticism from the BJP, state ministers Ramalinga Reddy and Dinesh Gundu Rao defended the bill's amendments. Transport Minister Ramalinga Reddy accused the BJP of being "anti-Hindu" and noted that similar amendments were made during their tenure in 2011.

Health Minister Dinesh Gundu Rao argued that the bill aimed to benefit temples, dismissing BJP's opposition as misleading. Former Chief Minister Yediyurappa questioned the scrutiny of only Hindu temples' incomes, raising concerns about fairness in comparison to other religions. 

Provision Existed Since 2001: Congress

The Congress on its part has refuted the BJP's allegations, saying that the provision was not new but has existed since 2001 and that only the slabs have been adjusted. Accusing the BJP of misleading the public, Karnataka Chief Minister Siddaramaiah posted on X, “The allegations regarding the Karnataka government's amendments to the Hindu Religious Institutions and Charitable Endowment Bill appear to be misrepresented for political gain. There has always been a mandate to create a common pool since the enactment of the Act in 1997. Before the recent amendment, the contributions to the fund came from (i) ten percent of the net income of institutions whose gross annual income exceeds ten lakhs rupees; (ii) five percent of the net income of institutions whose gross annual income exceeds five lakhs rupees but does not exceed ten lakhs rupees; and (iii) grants received from the State Government.” 

What Led to the Bill Being Defeated

The Opposition's main objection was on the "diversion" of income earned by temples. Muzrai Minister Ramalinga Reddy tried convincing them that the Bill was to provide social security to priests.

"I welcome the measure of providing social security to 40,000 archakas, but I oppose the diversion of temple income," Leader of the Opposition in the Council Kota Srinivas Poojary, a former Muzrai minister, said. "Why can't the government provide funds in the budget for the welfare of archakas?" he said.

After much debate, the Opposition agreed to pass the Bill if the changes suggested were incorporated.

However, Reddy sought time till Monday to discuss with Chief Minister Siddaramaiah as it had financial implications.

Council Deputy Chairperson MK Pranesh, who was presiding over the session, declined to give time till Monday. He put the Bill for voting, and it was defeated.