Bengaluru: The Karnataka Budget 2015-16 on Friday proposed 3 percent hike in VAT on cigarettes, cigars, gutkha and other manufactured tobacco products and by 1 percent on diesel and petrol, while laying thrust on rural development in the state.

Presenting the budget in the state Assembly, Chief Minister Siddaramaiah, who holds the Finance portfolio, also announced a sharp hike of additional excise duty by 6-20 percent across 17 slabs on Indian Made Liquor.

Seeking to provide relief to lower middle groups, he exempted persons drawing salary of less than Rs 15,000 from payment of professional tax as against the present limit of Rs 10,000 per month.

Senior citizens will also get relief with the reduction in the effective age from the current 65 years to 60 years to exempt them from payment of Profession Tax.

In a reflection of the state government's commitment to rural sanitation as in the case of the Modi government's pet "Swach Bharat" programme, Siddaramaiah said individual toilet would be constructed for each house in rural area.

In tandem, under the "Grameena Gourava" (rural dignity) scheme, toilet-cum-bathrooms would also be constructed in rural houses, the chief minister said.

Siddaramaiah said the scheme of disbursing short term agricultural loans up to Rs 3 lakh at 0 per cent interest and medium and long term agricultural loans up to Rs 10 lakh at 3 percent rate of interest would be continued with the target disbursement fixed at Rs 10,000 crore to benefit 23 lakh farmers.

A Vision Group for the agriculture, horticulture and food processing sectors would also be set up for an "overall vision" for the agriculture sector in Karnataka, said Siddaramaiah, who presented the 10th budget of his political career.