Chief Minister Basavaraj Bommai on Wednesday credited the Centre for Karnataka’s financial recovery by maintaining that the ‘double-engine government’, along with the State’s efforts to increase its revenue collection, had helped in putting Karnataka back on the track of economic development after a tough period of COVID-19.
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“Thanks to the double-engine government and the increase in revenue collection in all major sectors barring motor vehicle taxes, Karnataka is now back on the track of economic development,” the Chief Minister said, while replying to a debate in the Assembly on the State Budget.
Tax targets
“We have breached the tax collection targets set for various prominent sectors including Stamps & Registration, Excise and Commercial Taxes,” the Chief Minister said, while assuring the House that the State has recovered from the COVID-19 blow.
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Mr. Bommai said that the NDA Government at the Centre had provided more funds to the State compared with the previous UPA government and claimed that there was no substance in the Opposition Congress charges on reduction of funds to the State from the Centre after 2014.
He said the State had received ₹74,373 crore from the Centre during the regime of NDA-I (2014-19) against ₹39,828 crore during the UPA regime (2010-14). During 2019-22, the State had received ₹52,761 crore from the Centre.
With regard to devolution funds, Mr. Bommai said the State received ₹1,66,578 crore from the Centre during the 14th Finance Commission under the Narendra Modi-led government against ₹72,410 crore (2010-14) under the 13th Finance Commission during the UPA regime (2010-14). The 15th Finance Commission has recommended to the State a sum of ₹24,019 crore in 2021-22 but the State received ₹ 27,145 crore, he said.
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Moreover, many beneficiaries such as farmers and pensioners have been receiving funds directly from the Centre under various schemes such as Pradhan Mantri Kisan Samman Nidhi and Atal Pension Yojana and Ayushman Bharat. Under the Mudra loan scheme, a total of 1.67 people benefited from the State, he said.
‘Borrowings inevitable’
On the borrowings by the government, the Chief Minister said borrowings were inevitable since revenue receipts declined during two years of the pandemic. The State had lost revenue of ₹21,835 crore during the last two years owing to reduced economic activity. Moreover, the government had spent ₹15,645 crore on the management of the pandemic and providing compensation to families of victims, Mr. Bommai said.
The State’s outstanding debt grew by 107% during the Siddaramaiah-led government (2013-18). The State’s debt was ₹1.38 lakh crore from 1947 till 2013. But it increased to ₹2.86 lakh crore in 2018. There was no COVID-19 during the Congress regime and despite that the debt increased, the Chief Minister said.
He claimed that his government had maintained fiscal discipline and reduced borrowings by ₹4,000 crore from ₹67,100 crore to ₹63,100 crore in 2021-22. “We eat only rotis and not holiges,” Mr. Bommai said and hit out at the Siddaramaiah-led government for its alleged “poor fiscal management” during the normal years.
On the committed expenditure, he said a plan was prepared to reduce expenditure from 98% to 89% in the next one year.