Karnataka budget 2023-24: CM Siddaramaiah looks to ride high on tax buoyancy

BENGALURU : Chief minister Siddaramaiah is expected to enhance the outlay of the state budget to Rs 3. 2 lakh crore and is banking heavily on robust growth in tax collection, especially commercial taxes.
On Monday, Siddaramaiah, who will present the budget on July 7, held a pre-budget meeting with all revenueearning departments, including commercial taxes, excise, transport, and stamps and registration. The focus was on mobilisation of resources to fund the governing party’s five guarantee schemes.
In a boost for the government, all revenue heads, which exceeded targets in 2022-23, are showing a bullish trend for the current fiscal. This will give Siddaramaiah ample headroom to enhance targets.
For instance, the commercial taxes department mopped up over Rs 1 lakh crore in 2022-23 as against the original target of Rs 72,000 crore. Signs of phenomenal growth began showing as early as in thesecond quarter. Then chief minister Basavaraj Bommai, who held the finance portfolio had revised the target to Rs 84,000 crore. But the department exceeded even that, despite the Centre ending GST compensation (Rs 16,277 crore) in June 2022.
This has enthused Siddaramaiah who is said to be mulling hiking revenue targets for commercial taxes, which includes GST (goods and services tax), KST (Karnataka sales tax) on petrol and diesel, and professionaltax, to Rs 1. 1 lakh crore. This means the department will have to mop up about Rs 23,851 crore more than what it collected in 2022-23.
“It looks ambitious, but it can be achieved,” said BT Manohar, member of Karnataka’s GST advisory council. “Besides emphasising tax compliance, the government must focus on plugging revenue leaks such as fake invoices and tax evasion. The department can do it by taking the trading community and taxpayers into confidence. ”
Bommai had proposed abudget outlay of just over Rs 3 lakh crore, a jump from Rs 2. 6 lakh crore in 2022-23 crore. Siddaramaiah is expected to ramp it up, although many economists say it would be a tall order considering that the jump will account for 17% of the outlay pegged at Rs 2. 6 lakh crore in 2022–23.
“The growth story belonged to last year. We are not sure about the current fiscal,” said BDA Satya Babu Bose, director, Centre for Rural Studies and Development. “The biggest concern is drought. The rural economy would take a severe hit and it would adversely impact urban areas too. Siddaramaiah should be careful and ensure realistic estimates. ”
But finance department officials say they expect the departments of excise, transport, and stamps and registration to perform well. While the hike in additional excise duty (AED) on liquor and guidance value for property registration are being discussed, the targets for these departments are expected to be increased from Rs 35,000 crore to around Rs 38,000 crore and from Rs 17,000 crore to about Rs 25,000 crore, respectively.