Chief Minister Siddaramaiah peppered his Budget speech on Friday with criticism of the previous Bharatiya Janata Party (BJP) government in the State and the party-led government at the Centre and accused them of fiscal indiscipline, causing slow growth of economy, corruption, and maladministration.
“On the one hand, crony capitalists thrived, while on the other, common people suffered untold miseries. While the deadly pandemic was after our lives, maladministration and corruption cost common people much more,” he said.
Defending the five guarantee schemes of the Congress, he said they were necessary to “bring the people out of the calamitous cycle of suffering on account of demonetisation, COVID-19 pandemic, political instability, uncontrolled price rise, and lack of vision for development.” He claimed that corruption was one of the many significant contributions of the previous government.
Comparing the Compound Annual Growth Rate (CAGR) of various sectors of Karnataka’s economy during 2013-18 under the previous Congress regime and during 2019-23 when the BJP was governing the State, he said the previous government failed to revive the State’s economy from the COVID-19-induced slowdown. While the industrial sector grew at a CAGR of 8.7% and the service sector at a CAGR of 9.69% during 2013-18, the figures were 3.86% for the industrial sector and 4.25% for the service sector during 2019-23. Foreign Direct Investment inflows had dropped from $22 billion in 2021-22 to $10 billion in 2022-23.
Accusing the previous government of fiscal indiscipline, Mr. Siddaramaiah alleged, “The total outstanding liabilities at the end of 2017-18 were ₹2,45,737 crore, which shot up to ₹5,16,788 crore by the end of 2022-23. The debt repayment liabilities of the State were 9.5% of the revenue receipts in 2017-18, which increased to 15.06% of the revenue receipts in 2022-23.”
The Chief Minister pointed out that the previous government had failed to contain the committed expenditure and mobilise resources for public welfare programmes. Though the Budget size had increased by 50% between 2018-19 and 2023-24, the committed expenditure towards salaries, pensions, and interest payments increased by 81% in these five years. He claimed that the increasing outstanding loans and losses of electricity companies portrayed “the poor administration” by the previous government.
Tax devolution
Mr. Siddaramaiah alleged “gross injustice” to Karnataka in tax devolution, as per the 15th Finance Commission, which recommended only 3.65% of the divisible pool to be devolved to the State despite being one of the main contributors to the Centre’s revenue collection. Because of this, the State incurred a shortfall in tax devolution of ₹26,410 crore over the past three years, with ₹10,858 crore in 2023-24 alone.
“Although the same party was in power at the Centre, the then State government failed to protect the interests of the State by being a silent spectator without putting pressure on the Central government to not accept the anti-State recommendations of the commission,” the Chief Minister said in his Budget speech.
He came down heavily on the Central government for not giving ₹5,495 crore special grant for 2020-21, State-specific grants of ₹3,000 crore for holistic improvement of waterbodies, and ₹3,000 crore for the Peripheral Ring Road, despite a recommendation for the same by the 15th Finance Commission.
The Chief Minister said the Centre’s assurance that GST would have an annual growth rate of 14% had been proved false. Coupled with the discontinuation of GST compensation provided to the States from July 2022, this had caused a shortfall of nearly ₹26,954 crore in GST collections for 2023-24, which has had a severe impact on the fiscal position of Karnataka.
LS dreams
Mr. Siddaramaiah appears to be trying to use the State Budget to make a pitch for the Lok Sabha polls as the next political target for his party.
“Our government will strive to uphold the enormous trust bestowed by the seven crore Kannadigas, build their radiant future and give wings to the dreams of millions of Indians languishing in the dark phase of today’s India.” the Chief Minister said in the Budget speech.
He not only blamed the Centre for the woes of the people of Karnataka but also attacked the BJP dispensation at the Centre. He said, “Our trust is in diversity and inclusiveness and not in authoritarianism. We are committed to taking decisions on matters impacting public interest in an equitable manner by the convergence of diverse thoughts, ensuring freedom to live without fears and with the interdependence of all the people. Justice is not discrimination or polarisation or creating divisions in society.”
Published - July 07, 2023 02:23 pm IST
