Karnataka has a comfortable cash position and there is no need to avail loans from the Reserve Bank of India (RBI), according to the Mid-Year Review of State Finances 2016-17.
During the first six months of the financial year 2016-17, the revenue surplus was Rs. 8,751 crore as compared with the budget estimate of Rs. 522 crore, reflecting a comfortable mid-year revenue position. The revenue surplus would be maintained at the end of FY 2016-17.
The report, which was tabled in the State Legislative Assembly on Tuesday, said: “During the first half of FY 2016-17 due to the reasonably comfortable cash position, there is no necessity to avail Special Ways and Means Allowances (SWMA) or Normal Ways and Means Allowances (NWMA) from RBI.” When there is a mismatch in the cash flow of the receipts and payments, the State government avails loans in the form of SWMA/NWMA from RBI. The RBI makes payments for 90 days.
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The Fiscal Management Review Committee headed by the Chief Secretary has advised the Finance Department to closely study the impact of demonetisation and take necessary steps.
The committee noted that the sale of IML was less than estimated and hence it had advised the Excise Department to make efforts to ensure collection of excise dues as projected.
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Decline in Central aid
With a likely decline in devolution of funds from the Centre for centrally-sponsored schemes, the State has to bear the additional funds out of its own resources. Hence, the panel recommended a close watch on the receipts from the Centre for the rest of the year and advised departments to follow-up with respective ministries.
It stated that during the first half of 2016-17, revenue surplus was Rs. 8,751 crore with the revenue receipts of Rs. 63,373 crore and revenue expenditure of Rs. 54, 622 crore. “Thus there is a favourable mid-year balance.”
The mid-year review suggested a balanced approach while deciding on enhancing outlays. The total revenue receipts of the State during the first half of the year 2016-17 were recorded at Rs. 63,373 crore. Receipts during the first half of the year was around Rs. 16.94 per cent more when compared with that of the corresponding period of 2015-16.