In BS Yediyurappa’s Karnataka budget, borrowings see sharp increase
Karnataka chief minister BS Yediyurappa on Monday presented a budget allotment of ₹24,6207 crore as against the state budget of ₹22,9925 crore, registering an increase of over 7%.
"The Gross State Domestic Product (GSDP) has seen a downfall due to lockdown for controlling the Covid-19 pandemic during the year 2020-21. As per the initial estimations based on fixed prices, the GSDP has contracted by 2.6% in comparison with that of 2019-20," Yediyurappa said in his budget speech on Monday.
He added that the state and central government's tax collections are less than budgetary estimates that have led to reduced share of taxes to states.
"Hence the share of the state in central taxes has come down to ₹20,053 crore in the revised estimates from the budgetary estimates of ₹28,591 crore in 2020-21," according to Yediyurappa's budget speech.
He added that the rise in debts will also wipe out any hopes of achieving the 14% growth target projection made last year.
"The budget of the state was never made in such a difficult situation previously. In spite of this, I am presenting this budget with positive thoughts having the aim of achieving the developmental dreams," he added.
Yediyurappa, however, did not levy any taxes on the common man.
"I am not willing to put the burden of additional taxes on the common people," he said, referring to diesel and petrol.
The government reduced stamp duty for first registration of apartments valued between ₹35-45 lakh from 5%to 3%.
The agricultural sector has been allocated ₹31,028 crore. Yediyurappa has allocated ₹62,150 crore for welfare and inclusive growth sector, ₹29,688 crore for education, ₹27,386 crore for urban development, ₹21,181 crore for water resources, ₹16,516 crore for energy sector, ₹16,036 core for rural development and panchayati raj.
Yediyurappa has provided ₹52,529 crore for providing stimulus to economic activities. Bengaluru has been allocated ₹7,795 crore.
Frequent floods, droughts, unreliable rain and the Covid-19 pandemic had exacerbated Karnataka's severe fund crunch.
The revenue deficit is estimated to be ₹15134 crore and fiscal deficit is expected to be ₹59240 crore, which is 3.48% of the GSDP.
"The total liabilities at the end of 2021-22 is estimated to be ₹4,57, 899 crore, which is 26.9% of the GSDP," according to the budget.
The 2020-21 budget had stated that the government would borrow around ₹60,000 crore.