The mid-year review of the State finances has indicated that Karnataka’s economy is likely to face slowdown in the present financial year also. This is mainly because the State’s economy is integrated with the national economy whose growth was below 5 per cent during the first quarter of 2014–15.
Though Karnataka’s economic growth of 5.05 per cent during 2013–14 was marginally better than the national economic growth of 4.7 per cent, it was actually less than its own growth registered in 2012–13 at 5.31 per cent, notes the review presented in the Legislative Assembly on Thursday.
What has caused concern is that the review has termed the growth rate of excise, and stamps and registration — which form the major components of the State’s Own Tax Revenue — in the first six months of the present financial year over the corresponding period in the previous year as “tepid”.
The review has projected a shortfall of about Rs. 680 crore in the excise collection for the present financial year compared with the budget estimates. Against the budget estimates of excise collection of Rs. 14,430 crore for 2014–15, the State has been able to collect only Rs. 6,699 crore in the first six months of the financial year, which accounts for 46 per cent of the total target.
Similarly, the review has observed that the stamps and registration sector has performed below expectation during the first half of 2014–15, achieving only 44 per cent of budget target estimates.