With the COVID-19 pandemic likely to hit revenue generation in 2021–22, Chief Minister B.S. Yediyurappa on Wednesday said the government would do its best to strike a balance between revenue and expenditure, though borrowing loans would be inevitable to fund development activities in the State.
The Chief Minister said it was not just Karnataka that had presented a revenue deficit Budget for 2021–22, but many States, including Kerala, Maharashtra, and Tamil Nadu, too had presented such budgets.
Mr. Yediyurappa read out a 21-page reply to the debate on the State Budget 2021–22 in the Legislative Assembly amid dharna by the Opposition Congress demanding a Karnataka High Court-monitored probe into the CD scandal in which the former Minister and BJP MLA Ramesh Jarkiholi is accused of sexually exploiting a woman after promising her a government job.
On the Opposition members’ charge about vacancies in the government departments, he said of the sanctioned posts of 7,68,975, a total of 5,16,073 were filled through direct recruitment. A large number group ‘D’ posts such as driver and data entry operator were vacant and these posts would be outsourced, he said.
The State government would be burdened with an additional ₹12,000 crore a year if all vacant posts were filled through the direct recruitment process. This would again increase committed expenditure and reduce available funds for development works. Only essential vacant posts would be filled through direct recruitment in a phased manner in the future, the Chief Minister said.
Noting that fiscal deficit was estimated to be ₹59,240 crore, which constituted 3.48% of the GSDP in 2021–22, the Chief Minister said estimated fiscal deficit in Tamil Nadu was 3.94%, Kerala 3.5%, and Maharashtra 2.24% of their respective GSDP in 2021–22.
He said the pandemic had reduced the State’s revenue amounting to more than ₹20,000 crore in 2020–21. By reducing the borrowing limit to 4% of the GSDP in 2021–22 against 5% in 2020–21, the State was expected to reduce an additional burden of ₹9,000 crore and annual interest payment of ₹700 crore, said Mr. Yediyurappa. The State has proposed to borrow ₹71,322 crore by limiting borrowings at 4% of the GSDP.
Total liability
The Chief Minister said the total liabilities at the end of 2021–22 were estimated to be ₹4,57,899 crore, which is 26.9% of the GSDP. The Karnataka Fiscal Responsibility Act, 2002, was amended to limit the borrowings to 4% of the GSDP in 2021–22. In 2020–21, the Centre permitted the State to borrow up to 5% of the GSDP.
The State Budget and Bills related to the Budget were passed amid protest and sloganeering by Congress members.
