The Hindu : Budget is unrealistic and lacks vision: Siddaramaiah

Online edition of India's National Newspaper
Sunday, Mar 23, 2003

Southern States

Southern States - Karnataka-Bangalore

Budget is unrealistic and lacks vision: Siddaramaiah

By Our Special Correspondent

Bangalore March 22. The President of the State unit of the Janata Dal (Secular) and former Deputy Chief Minister, Siddaramaiah, has said that the Budget for 2003-04 presented by the Chief Minister, S.M. Krishna, on Friday is "unrealistic and lacks vision".

Mr. Siddaramaiah, who was the Finance Minister in the previous Janata Dal Government, told presspersons here today that the Budget contained a number of programmes which were just eyewash since they lacked the financial support required. Most of the schemes would remain on paper like those announced in the last Budget.

He said the Government had borrowed huge sums from various agencies and even the payment of salaries to government employees was being paid from loans. In contrast to what the Government had claimed in the previous Budget, borrowings during the year had gone up by nearly Rs. 1,100 crore. The Government was walking into a debt trap and, going by the present state of affairs, its successor would end up servicing the debt. It would be forced to ignore development activities due to the shortage of funds. The Government was spending nearly 20 per cent of its resources on debt servicing now.

Mr. Siddaramaiah said the Chief Minister had failed to honour his commitment to overcoming the revenue deficit and reducing the fiscal deficit to three per cent of the Gross State Domestic Product, which he had promised after assuming office. "The Chief Minister had stated that it was his vision and he would achieve it by 2005. On the contrary, the revenue deficit has substantially increased over the past three years and is expected to cross Rs. 5,000 crore by the end of the year. Most of the figures pertaining to the financial position presented in the Budget are mere jugglery and does not present the truth," he added.

In the last Budget, the Government had stated that the revenue deficit would be around Rs. 2,600 crore and it was later revised to Rs. 3,400 crore.

The huge gap of Rs. 800 crore could be made good either by additional resource mobilisation or through borrowings. But the Government preferred the latter as it was an easy way out, he said.

Mr. Siddaramaiah said there was a big gap in collection of taxes due to corruption and the Government yielding to the business lobby. Compared to the target set earlier, the net shortfall in tax collection was Rs. 1,600 crore. In the coming year, the VAT regime would come into force and the Centre had promised the State that its losses on this count would be compensated. However, as a precaution, the Government should have made a budgetary allocation towards meeting the shortfall in tax collection.

He charged that the Budget was anti-farmer and there was hardly any mention about the payment of immediate compensation to the families of farmers who committed suicide.

The farmers who were in distress because of the drought had to pay a higher APMC cess now to enable the authorities enhance the amount under the revolving fund.

Mr. Siddaramaiah said the Government had no moral right to claim that the Budget was pro-farmer. Even the basic demand of the farmers pertaining to proper power supply had not been conceded, and the Government had failed to fulfil the promise that it would ensure a 12-hour three-phase power supply to irrigation pumpsets daily. The promise to waive the interest on farm loans had remained on paper.

He said there was no attempt to reduce wasteful and non-Plan expenditure, which was one of the major reasons for the shortage of funds. The Tax Reforms Commission and the Administrative Reforms Commission had suggested several ways to reduce wasteful expenditure but the Government did not care to adopt them. The non-Plan expenditure, which was Rs. 6,000 crore three years ago, had now increased to Rs. 9,300 crore. Mr. Siddaramaiah regretted that there was no mention about how the Government proposed to handle admissions to professional colleges.

The Government had only mentioned its plan to start a women's university in Bijapur and a university of veterinary sciences in Bidar, which would be a burden on the exchequer. "It is quite obvious that the Government is controlled by the education lobby," he said.

The Chairperson of the women's wing of the JD(S) and former minister, B.T. Lalitha Naik, said women and children would take out a procession to the Chief Minister's office on Monday seeking a ban on online lottery.

It would be a symbolic protest and an effigy of the Chief Minister would be burnt, she added.

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