Bommai presents maiden budget, says Karnataka on recovery path

Bengaluru, March 4 : Karnataka Chief Minister Bassavaraj Bommai on Friday said the state is on road to recovery with its GST collections increasing in 2021-22, compared to the previous year. Presenting his maiden budget, the Chief Minister, who is also holding the Finance portfolio, said the Indian government has supported Karnataka by giving Rs 18,109 crore as GST loan in lieu of GST compensation in addition to Rs 7,158 crore as GST compensation amount for 2021-22. “This has helped us not only to effectively manage Covid-19 and its related expenses, but also ensured that all development works and programmes were funded adequately, providing impetus to growth,” he said. Since GST compensation is going to end in June 2022, the state is trying to mobilise additional resources by increasing its tax collections and non-tax collections, added Bommai. He said, “I have also requested the central government to extend the GST compensation to States by at least three more years to manage the future liabilities.” The state has had to face a lot of challenges over the past two years due to the onset of Covid-19 pandemic, which has resulted in slowdown of the economy, however, the economy seems to be rebounding as seen in the Revenue collection figures for 2021-22, Bommai stated. “This has been made possible due to the efforts by the government to combat the pandemic as well as to push growth,” he said. “In 2021-22 all sectors have shown growth compared to 2020-21. Industrial sector has grown by 7.4 per cent, service sector has grown by 9.2 per cent and agriculture sector has grown by 2.2 per cent,” he added. Overall GSDP for 2021-22 at constant prices is expected to grow by 9.5 per cent compared to the previous year, Bommai said. “There will be more efforts put to continue on this path of recovery in 2022-23 by presenting a progressive and growth oriented budget,” he said. The Indian government has facilitated the states to obtain loans up to 4 per cent of GSDP during 2021-22, as support to them to overcome the economic slowdown due to the Coronavirus impact, Bommai said. Accordingly, the government has amended Karnataka Fiscal Responsibility Act 2002 to avail this facility, he added. Even though the Central government, in its on budget for year 2022-23, has allowed the states to borrow up to 3.5 per cent of GSDP, the state has restricted the borrowing to 3.26 per cent. “By this, we have demonstrated our commitment to fiscal discipline and forethought,” he said. While the Indian government allowed additional borrowings over the last two years, the state has been successful in keeping borrowings under control, Bommai said. “In the current financial year I propose to restrict the borrowings to Rs 63,100 crores instead of the budgeted Rs 67,100 crores,” he said. For the year 2022-23, the state is planning to borrow Rs 72,000 crore, added Bommai. Talking about the state’s financial position, the Chief Minister said the revenue collection started in a sluggish manner due to the second wave of Covid-19 pandemic at the start of the year, but during the course of the year it picked up and the state will be reaching its targets estimated in the budget. “The Central government’s revenue collections has also increased in the financial year 2021-22, because of which the share of Central taxes to the State has been increased in the revised estimates to Rs 27,145 crore from Rs.24,273 crore estimated in the budget,” he said. The on government, in its budget for 2022-23, had estimated Rs 29,783 crore as tax devolution to Karnataka, Bommai said. BDN RJ

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