Daijiworld Media Network - Bengaluru (MS)

Bengaluru, Oct 13: The major opposition political party of the state Congress warned chief minister B S Yediyurappa about the tough road the state has to tread in the coming days with regards to the financial strength of state exchequer. Incidentally, the state legislature passed a budget of Rs 2.40 lac crore for the fiscal 2019-20.

The government was allowed to withdraw funds from the consolidated fund for the remaining period of the fiscal 2019-20 as the Karnataka Appropriation Bill was passed in both houses of the legislature. The former coalition government of Congress and JD (S) took permission to spend Rs 80,168 crore for the first four months of the fiscal year by a vote-on-account. This was then extended till the month of October for Rs 62,751 crore. Rs 7,927.23 crore of supplementary estimates were also passed as a second installment.

During a debate of demand of grants, the former CM and leader of opposition Siddaramaiah, who has a rich experience of presenting 13 state budgets, expressed his concern and said, "I doubt of attaining the mark of Rs 16.98 lac crore of Gross State Domestic Product (GSDP), which is estimated to be achieved." He also demanded to know whether the fiscal deficit will remain below 3%, as per the Karnataka Fiscal Responsibility Act, if the GSDP reaches only Rs 15 lac crore.

Siddaramaiah also cautioned the CM that if the GSDP does not reach as per the goal, then the fiscal deficit will also not remain within the limits. He also said that the borrowings should not exceed 25% of GSDP. In the fiscal of 2018-19, the borrowings were maintained at 20.26%.

The former CM also urged Yediyurappa to cut down on unnecessary expenditure and intensify revenue mobilization. He said that the growth of the country has slumped to 5% from 8% in the last fiscal. According to Siddaramaiah, the slump in the growth is due to the economic slowdown in the country and it will affect other states also. That is why the motor vehicle tax collection in the state has fallen.

Siddaramaiah also alerted CM Yediyurappa towards the Mid Year Review of State Finances which has highlighted that Karnataka may lose Rs 1,672 crores due to cuts in corporate income tax rates. He urged the CM to demand this money from the center as the state is hit both with floods and drought in the recent past.

Replying to the concerns expressed by the former CM and state opposition leader Siddaramaiah, CM Yediyurappa, said, "My words on the financial position of the state treasury is being misunderstood. I have told the MLAs, who were asking funds to develop their constituencies to hold on as the priority of the government is the rehabilitation of flood-affected victims. I have asked the MLAs to wait till December, after which we will give them funds for development works in their respective constituencies. There is no need to panic. The financial position of state exchequer is absolutely fine."