Karnataka continued to maintain its revenue-surplus position in the years from 2012-13 to 2016-17 and managed to keep the fiscal deficit relative to GSDP below the limit set under the Karnataka Fiscal Responsibility Act (KFRA) 2002, said the Comptroller and Auditor General of India (CAG) in its report on State finances for the year ended March 2017.
During 2016-17, the State had a revenue surplus of ₹1,293 crore, though it had slipped ₹496 crore over the previous year (2015-16).
The fiscal deficit during 2016-17 was ₹28,664 crore (2.57 per cent of Gross State Domestic Product or GSDP), an increase of ₹9,495 crore over 2015-16. The primary deficit, at ₹15,814 crore, was up ₹7,988 crore when compared to 2015-16.
Open market loans constituted 49 per cent of the total liabilities, said the CAG report.
The State’s debt sustainability — that is, the burden of interest payment measured by the ratio of nterest payments to revenue receipts (IP/RR) — revealed that the IP/RR ratio was 9.65 per cent during the year (2016-17) which is within 10 per cent norm recommended by the 14th Finance Commission.
Karnataka’s public accounts borrowings constituted 29 per cent and NSSF loans were 9 per cent Central Government loans formed 6 per cent, off-Budget borrowings 5 per cent and negotiated loans 2 per cent of the total fiscal liabilities.
Revenue expenditure
The CAG report said the revenue expenditure increased 13 per cent compared to 2015-16. Spending on social and economic services grew 18 and 19 per cent, respectively, over 2015-16, while that in general services was 2 per cent.
The share of Plan expenditure to total revenue expenditure increased from ₹40,009 crore in 2015-16 to ₹47,962 crore in 2016-17. The total explicit subsidy of ₹14,387 crore during the year was mainly towards power (₹8,647 crore), food (₹1,854 crore), co-operation (₹818 crore) and transport (₹799 crore).
Fiscal Position
Karnataka continued to maintain its revenue-surplus position in the years from 2012-13 to 2016-17 and kept fiscal deficit relative to GSDP below the limit set under the Karnataka Fiscal Responsibility Act (KFRA) 2002, said the Comptroller and Auditor General of India (CAG) in its report on State finances audit for the year ended March 2017. Thelaid down under KFRA.
During 2016-17, the State had a revenue surplus of ₹1,293 crore, which had slipped however a decrease of ₹496 crore over the previous year (2015-16).
The fiscal deficit during 2016-17 was ₹28,664 crore (2.57 per cent of GSDP), an increase of ₹9,495 crore compared to 2015-16. The primary deficit was at ₹15,814 crore, an increase of ₹7,988 crore when compared to 2015-16.