Yediyurappa admits fund crunch in Karnataka budget

BENGALURU: If there were any doubts that Karnataka is reeling under severe financial distress and resource crunch, Chief Minister BS Yediyurappa's budget speech put all of it to rest. 

Presenting a budget whose size is barely 2 per cent larger than the fiscal year 2019-2020's budget, Yediyurappa said he was compelled to cut down the expenditure of many departments.

"The state's share in central taxes has come down in 2019-2020 as per the revised budget estimates of the Central government. Due to this, there is a reduction of Rs 8,887 crore to Karnataka. Therefore state's revenue resources have been reduced. Assist from this, Rs 3000 crore GST compensation will also be reduced as collections from the heart compensation cess is not as expected," BS Yediyurappa said laying down his financial constraints.

The State Gross Domestic Product too has fallen by 1 per cent from fiscal year 2018-19 and is expected to reach a growth rate of 6.8 per cent for 2019-2020.

Despite the fiscal challenges, chief minister Yediyurappa presented a budget adhering to Karnataka Fiscal Responsibility Act with estimated revenue surplus of Rs 143 crore, estimated fiscal deficit at 2.55 per cent of GDP and liabilities of Rs 3,68,692 crore at 20.42 per cent of the GDP.

Despite his claim of primary focus on agriculture, Yediyurappa's budget saw no new prominent new schemes but the chief minister highlighted his efforts in bringing out a 'child budget' that focuses on well being of children below the age of 18.

Out of the about Rs 2,37,000 crore budget, Rs 32,259 crores has been allocated for agricultural and allied activities sector that includes water resources, horticulture, sericulture, weavers, fisheries etc. Instead of a ministry or department wise allocation, Yediyurappa chose to club ministries under sectors.