Bengaluru: Higher borrowing, increase in excise duty and setting bigger revenue targets for various departments. That’s what Karnataka Chief Minister Siddaramaiah laid down in his budget on Friday as his government tries to finance five key poll promises of the Congress party, including the free power scheme.
Presenting his first budget after his Congress government came to power in Karnataka, Siddaramaiah raised duty on all 18 slabs of India Made Liquor (IML) by 20 per cent and beer by 10 per cent.
The state also plans to revise the guidance value – the minimum price of a property fixed by the government, This will also lead to an increase in stamp duty and registration tax for home and property buyers, though the hike has not been clearly mentioned.
The hike, which the government hopes will help generate more revenue, is especially significant in light of the Congress government’s five key guarantees – 200 units of free electricity (Griha Jyoti), Rs 2,000 per month to the female head of the household (Griha Lakshmi), free bus travel for women (Uchita Prayana), 10 kg rice/person per economically backward household (Anna Bhagya) and financial assistance for unemployed graduates and diploma holders (Yuva Nidhi).
These guarantees, made as poll promises ahead of the Karnataka elections on May 10, are estimated to cost the state exchequer a whopping Rs 60,000 crore and are expected to drain the state’s resources.
In his speech, Siddaramaiah, who also holds the finance portfolio, has earmarked Rs 52,000 crore for the guarantee out of a total outlay of over Rs 3.27 lakh crore. He He accused the Narendra Modi government of declining the state’s growth rate and increasing its debt. According to him, Karnataka’s total outstanding debt at the end of 2022-23 was Rs 5.16 lakh crore – up from Rs 2.45 lakh crore at the end of 2017-18.
It is important to note that the coalition government of the Congress and its then ally Janata Dal (Secular) fell in July 2019 following a political crisis. After this, the BJP-led government was formed under the leadership of BS Yeddyurappa and then Basavaraj Bommai.
“The economy deteriorated during the tenure of the previous government…Karnataka is known for its strict adherence to fiscal discipline. However, the previous government failed to observe fiscal discipline during its tenure,” Siddaramaiah said while reading out his 112-page budget, adding that the state will have to borrow Rs 85,818 crore this fiscal to make up for the shortfall in revenue. hopefully.
This is the last budget for the current financial year – while former CM Bommai presented an interim budget in February, his government lost the elections in May.
This is Siddaramaiah’s 14th consecutive budget, though his seventh as chief minister.
Read also: ,Frightened Siddaramaiah cancels proposed bridge in first term – Shivakumar’s remarks stir Congress
revenue deficit budget
Siddaramaiah also presented his first revenue deficit budget on Friday. According to him, the total revenue is estimated to be Rs 2,38,409.81 crore, while the total expenditure is estimated to be Rs 2,50,932 crore – registering a revenue deficit of Rs 12,523 crore. The chief minister admitted that his government could not present a revenue surplus budget “due to allocation of funds to meet guarantees”.
According to him, the government is expected to get an additional revenue of Rs 1,000 crore from excise and transport taxes, Rs 6,000 crore from stamp and registration taxes and Rs 1,500 crore from mines and geology. Apart from this, the government will borrow an additional Rs 8,000 crore, he said.
In February, Bommai presented a budget of Rs 3,09,182 crore – the first time a state budget exceeded Rs 3 lakh crore.
The Congress government has already implemented free public bus travel for women and is currently working on the modalities for the rest. announced to give cash equivalent Till the time the state gets a steady supply of food grains, an additional 5 kg of rice will be provided to all eligible beneficiaries.
It has also called for tenders to buy rice from the open market after the Center discontinued its policy of allowing states to bid for rice and wheat from the central pool.
In February, Bommai had said that Karnataka is estimated to raise Rs 77,750 crore in the current fiscal and is expected to receive Rs 37,252 crore as share in central taxes and Rs 13,005 crore as grant from the Union.
However, in his speech, Siddaramaiah accused the central government of “not sharing the resources” of Karnataka, leading to a cash crunch in the state.
“The central government does not share the cess and surcharge collected with the states as devolution. Siddaramaiah said, the increase in cess and surcharge levied on taxes has led to a reduction in the tax devolution share to the state.
The CM also blamed the state shortfall on the central government’s decision to stop paying GST compensation to states. He said, the decision taken in July 2022 has led to a shortfall of about Rs 26,954 crore in the current financial year, which has had a serious impact on the financial condition of the state.
The chief minister announced that as part of his “re-prioritisation” exercise to create more financial space for guarantees, the government would abandon “wasteful spending”. However, he did not specify which schemes would be cut.
The BJP called it a “political budget”. Bommai criticized Siddaramaiah for devoting nearly 50 paragraphs to his criticism of the BJP.
“They (Congress) said they needed Rs 52,000 crore to fulfill the guarantee. Since almost half a year has passed, there is no need to raise taxes or take more loans,” Bommai told reporters.
(Edited by Uttara Ramaswamy)
Read also: From Shepherd to Chief Minister of Karnataka, Again – A Look at Siddaramaiah’s Political Journey