Amid criticism from the Opposition on the increased fiscal deficit in 2022-2023, Chief Minister Basavaraj Bommai on Friday said the Budget had to be seen in the context of COVID-19 that reduced revenue receipts and increased pandemic-related expenditure.
“The loan component increased due to reduced revenue receipts and increased COVID-19 expenditure. The Government has spent ₹15,645 crore on COVID-related packages and infrastructure while revenue receipts to the Government reduced by ₹21,835 crore,” Mr. Bommai, who holds the Finance portfolio, informed the Legislative Council during his response to the debate on the Budget.
Despite the dire financial condition, he said that the Budget size went up to ₹2.65 lakh crore, 7.9% higher than 2021-2022. “Efforts have been made to reduce committed expenditure by about 8% and increase tax efforts by arresting the pilferage. I am expecting that ₹8,000 crore more will be collected in commercial tax while excise revenue is expected to go up by ₹2,000 crore and stamp duty by about ₹1,000 crore.”
He said that the debt that is currently at 27.4% of the GSDP will be reduced in coming years, and the State did not go for higher borrowing though it was possible. Mr. Bommai said that a fiscal deficit at 3.26% was still within the limits and hoped to do better. “In 2021-2022, though it was estimated to avail loan to an extent of ₹67,100 crore, the State ended up borrowing ₹4,000 crore less at ₹63,100 crore,” he said.
At revenue deficit of ₹14,699 crore, Karnataka is still better than comparable States like Andhra Pradesh, Maharashtra, Gujarat, and Rajasthan, he added. “In fact, though a revenue deficit of ₹15,645 crore was estimated in 2021-2022, it ended up at just ₹6,478 crore,” he said. He blamed the coalition Government for reduced devolution from the Centre by not forcefully putting up the case of the State before the 15th Finance Commission.
Expressing confidence that the State will grow more than the targeted 9.5% in the coming fiscal, Mr. Bommai said the Budget would provide the thrust for growth.
