Karnataka Chief Minister Basavaraj Bommai presented his maiden budget in the legislative assembly in Bengaluru on Friday.
The state budget 2022-23, with an outlay of Rs 2.6 lakh crore, is an increase of 7.7 per cent compared to the previous year. However, it is 3.3 per cent larger than the revised estimate of 2021-22.
"The economy in 2021-22 is on the road to recovery. In these circumstances, I am not willing to put extra burden of additional taxes on common man. Tax collection targets will be achieved by ensuring all the tax departments perform better," said Bommai, adding that the economy had revived, with service sector growing by 9.2 per cent, industrial sector by 7.4 per cent and agriculture sector by 2.2 per cent. The GSDP is expected to grow by 9.5 per cent compared to the previous year.
The budget has managed to keep fiscal deficit at 3.26 per cent though the Centre allows states to borrow up to 3.50 per cent of GSDP.
With the state planning to borrow Rs 72,000 crore this fiscal year, the total liabilities on the state in 2022-23 will be Rs 5,18,366 crore, which is 27.49 per cent of the GSDP.
"We will bring in a suitable amendment to the Karnataka Fiscal Responsibility Act (KFRA), 2002, as it restricts borrowings to 25 per cent of GSDP, " reasoned Bommai.
Noting that the state GST collections had increased in 2021-22 compared to the previous year, Bommai said the state was on the road to recovery.
"The Centre has supported the state by extending a GST loan of Rs 18,109 crore in lieu of GST compensation, in addition to Rs 7,158 crore as GST compensation amount for 2021-22. This helped us to effectively manage the Covid situation as well as stay focused on development works too. As the GST compensation is to end in June 2022, the state needs to mobilise additional resources by increasing our own tax collections as well as non-tax collections. I have also requested the Centre to extend the GST compensation to states by at least another three years to help manage the future liabilities," said Bommai.
The revenue collection has been encouraging despite the two waves of covid-19 pandemic, said the CM, adding that in 2021-22, the revenue from the commercial tax department was Rs.70,757 crore (upto February), stamps and registration - Rs 12,105 crore, excise - Rs.23,726, and transport - Rs 5,960 crores.
"During the pandemic, the reduced supply of vehicles impacted vehicle registrations too. A tax rebate of 100 per cent to passenger transport vehicles given during May 2021 and a tax rebate of 50 per cent to passenger transport vehicles during June 2021 and the exemption given to state transport corporations from paying motor vehicle taxes to aid the recovery due Covid impact affected resource mobilisation in transport sector."
While the state budget in 2021-22 had to decrease the expenditure and showing restraint in announcing new schemes, the budget of 2022-23 is one of hope. The hope to grow and the hope for a better future.
