Leader of the Opposition in the Assembly Siddaramaiah on Monday said the State Government will be caught in a vicious circle of debt by increased borrowings every year to meet revenue and capital expenditures and termed the Budget as disappointing and not growth-oriented.
He initiated a discussion on the State Budget for 2022-23 in the Legislative Assembly and said Chief Minister Basavaraj Bommai has not spelled out the achievements of the Government during the last two years and had only made a slew of promises. There was no vision in the Budget and it only doled out many assurances. He said that the Chief Minister had clearly come under the influence of RSS while coming up with the promises.
Whopping interest
Owing to increased loans over the last couple of years, the borrowings of the Government are estimated at ₹5.18 lakh crore in 2022-23 against ₹2.42 lakh crore in 2018-19. The Government would end up paying a whopping interest rate of ₹27,000 crore on loans in 2021-21 and ₹29,397 crore in 2022-23. The repayment of principal amount and interest rate would touch ₹43,000 crore in 2022-23, the former Chief Minister said.
The State Government has maintained that increased borrowing during the last two years was largely owing to reduced revenue following COVID-19 induced lockdown and restricted economic activities.
Mr. Siddaramaiah said that by indulging in excessive borrowings, the Government has not followed the norms fixed in the Karnataka Fiscal Responsibility Act, 2002. The revenue deficit was estimated at ₹14,699 crore and fiscal deficit estimated at ₹61,564 crore, which was 3.26% of the GSDP in 2022-23, said Mr. Siddaramaiah, who has presented 13 Budgets as Deputy Chief Minister and later as Chief Minister.
Besides decline in the State’s share in the Central pool of taxes, the Congress leader said the Centre’s share in the centrally-sponsored projects has declined from 75% in 2013-14 to 49.95% in 2021-22. He asked the State Government to put pressure on the Centre to contribute more funds in the centrally sponsored projects.
On land acquisition
Law and Parliamentary Affairs Minister J.C. Madhuswamy said implementation of the Land Acquisition Act enacted during the UPA Government in 2013 has increased the cost of purchase of lands which led to increase in the share of State funds in the Centrally sponsored projects. Under the scheme, the State has to buy lands for the projects, he said.
Mr. Siddaramaiah countered the Minister and asked him to seek more funds from the Centre since it was returning only about ₹44,000 crore a year to the State out of the tax collection of ₹3 lakh crore from the State. The State suffered a big loss in devolution of funds under the 15th Finance Commission, he said.
