Karnataka: Will budget be tightrope walk on poll promise paradigm?

BENGALURU: One of the first challenges that the new dispensation under chief minister Siddaramaiah will have to tackle since assuming office earlier this month is formulating a fresh budget for the 2023-24 financial year. Come next week, the CM and his team will be back to brainstorming and number-crunching, working out a financial roadmap for this fiscal, once cabinet expansion and allocation of portfolios are done and dusted.
Siddaramaiah and deputy CM DK Shivakumar left for New Delhi on Wednesday to discuss cabinet expansion with the Congress brass.
With the first session of the 16th legislative assembly ending on Wednesday, the new government is planning to summon the monsoon session in July when it is supposed to present a full-fledged budget for the current financial year. In view of the assembly elections, the outgoing BJP government led by Basavaraj Bommai had taken a vote-on-account to incur expenditures up to July 31.
While Siddaramaiah is expected to retain the finance portfolio, he will earn the distinction of presenting the state budget for a record 14 times. His first budget for the current term as CM will focus on the delivery of the five guarantees announced by the Congress in its poll manifesto and mobilisation of resources for their implementation. According to Siddaramaiah’s own estimates, fulfilling the poll guarantees will cost the state exchequer around Rs 50,000 crore.
“The opposition is spreading false information that implementation of the schemes we have promised requires a large amount of money and will result in the state sinking deep into debt. While our initial math shows that we require Rs 50,000 crore, I am confident that the government can implement these schemes while ensuring there is no additional debt burden on the state,” Siddaramaiah had told the media after the first meeting of his cabinet, which granted an in-principle approval to the guarantee schemes.
The CM’s assurance notwithstanding, the moot point remains that implementation of these guarantee schemes is likely to disrupt Karnataka’s economy as it is already burdened with liabilities mounting to Rs 5.64 lakh crore -- a leap from Rs 2.42 lakh crore in 2018. This has already resulted in the government spending a whopping Rs 56,000 crore on servicing existing debt, including interest payments. Siddaramaiah has said he would present a budget with an outlay of Rs 3.25 lakh crore; former CM Bommai had pegged his budget outlay at Rs 3.09 lakh crore, with 75% of it going to revenue expenditure, leaving little room for development.
Minister Priyank Kharge said: “The new budget will lay emphasis on mobilising resources through non-tax revenue rather than increasing tax rates, as people are already suffering from price rise.”
He further said the government will look to increase its revenue through means such as revising the advertisement policies of local bodies like BBMP and others.
The robust growth in tax collection and good performance by all revenue-earning departments have been quite an upside. While the tax target was raised from Rs 72,000 crore to Rs 83,000 crore for 2022-23, the commercial taxes department mopped up Rs 1.02 lakh crore. It has collected about Rs 13,950 crore this financial year, compared to the Rs 12,800 crore collected during the corresponding period last year.
“It is encouraging as we have achieved almost last year’s figures, considering the poll season that was coupled with the model code of conduct. The trends are bullish and we are confident of meeting the target (Rs 19,000 crore),” said Mamatha BR, the inspector general of registration and commissioner of stamps. The departments of excise and transport, which have targets of Rs 35,000 crore and Rs 10,500 crore, respectively, are also said to be on course.