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Karnataka Chief Minister Siddaramaiah, whose party will face the State elections a couple of months from now, as expected, presented a populist Budget with a slew of benefits for farmers, health and social welfare sectors and for Bengaluru.
Presenting his 13th budget, Siddaramaiah, 69, announced zero per cent interest rate for loans up to ₹3 lakh for farmers and a ₹2,500-crore outlay for Bengaluru. He, however, increased existing rates of additional excise duty on Indian-Made Foreign Liquor (IMFL) by 8 per cent from the 2ndto the 18th slab.
The Budget has reduced sales tax rate on sale of ATF (Aviation Turbine Fuel) for small aircraft from 28 per cent to 5 per cent, which will give a boost to the Centre’s regional connectivity scheme UDAN. The Chief Minister, who also holds the Finance portfolio, announced an insurance scheme for journalists and newspaper distributors.
The government announced an increase in pension for sportspersons and setting up of a sports university under the PPP model. It has decided to waive penalties on property taxes for industries in industrial areas and townships if the principal amount is paid in a single instalment.
The Budget also makes provision for giving incentive of ₹3 lakh for an SC boy marrying a girl from any other caste and ₹5 lakh for an SC girl marrying a boy from another caste.
Resource mobilisation
The State’s own tax revenue for 2018-19, including GST compensation, is estimated to be ₹1,03,444 crore, an increase of 12.78 per cent over the revised estimate of 2017-18. The Chief Minister expects ₹8,163 crore from non-tax revenues and receive ₹36,215 crore by way of share in Central taxes in the Budget, and another ₹14,942 crore as grants from the Centre. These revenue receipts are estimated to be supplemented by gross borrowings of ₹39,328 crore, non-debt capital receipts of ₹75 crore and recovery of loans to the extent of ₹129 crore. The Karnataka government has a deficit of ₹383.25 crore. Various State-owned boards and corporations and local bodies are expected to mobilise ₹16,760 crore through internal resource generation and borrowings made on the basis of their own financial strength and own revenues.
Revised estimates for ’17-18
As per the Revised Estimates for 2017-18, total receipts are ₹1,83,263 crore compared with the Budget Estimates of ₹1,82,119 crore. The revenue mobilisation efforts of the State stand at ₹1,46,033 crore, out of which the Own Tax Revenues including GST compensation are estimated at ₹91,718 crore. As per the Revised Estimates, the Total Expenditure is ₹1,89,679 crore,an 11.9 per cent increase over 2016-17.
Budget estimates
The total receipts are estimated to be ₹2,02,297 crore during 2018-19. The Budget estimates envisage revenue receipts of ₹1,62,765 crore and capital receipts of ₹39,532 crore, including borrowing of ₹39,328 crore.
The total expenditure is estimated to be ₹2,09,181 crore consisting of revenue expenditure of ₹1,62,637 crore, capital expenditure of ₹35,458 crore and debt repayment of ₹11,086 crore. Out of the total expenditure, ₹ 28,002 crore has been provided under Schedule Caste/Schedule Tribal sub plan.
Revenue surplus is estimated to be ₹127 crore. Fiscal deficit is expected to be ₹35,127 crore, which is 2.49 per cent of Gross State Domestic Product (GSDP). Total liabilities is at ₹2,86,790 crore at the end of 2018-19, estimated to be 20.36 per cent of GSDP. This is within the limit of 25 per cent for 2018-19 mandated in Karnataka Fiscal Responsibility Act.
The Budget estimates for the current year was fixed at ₹55,000 crore. The government expects to surpass the given target by over ₹2,200 crore despite the fact that the benefit of reduction of ₹ 3.21 per litre on petrol and ₹2.68 per litre on diesel has been passed on to the consumers in view of introduction of GST from July 1, 2017, without corresponding increase in the sales tax rates applicable to these products. Revenue collection target from Commercial Taxes for the year 2018-19 is fixed at ₹65,800 crore.
Siddaramaiah said the government had fixed a revenue target of ₹18,050 crore for the Excise Department for 2017-18. At the end of January, ₹14,572 crore has been collected. Due to the Supreme Court Order banning liquor shops near highways, more than 3,000 excise licences were not renewed. Since then, there has been a modification in the order and this is expected to mobilise revenue of ₹17,600 crore for the current financial year.
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