The Modi government’s demonetisation exercise had caused “great” distress to people and hit the state’s revenues from stamps and registration, causing a shortfall of Rs 1,350 crore during 2016-17, Chief Minister Siddaramaiah said in his budget on Wednesday. Presenting the 2017-18 budget in the Assembly, Siddaramaiah, who also holds the Finance portfolio, questioned the very need for demonetisation decision and said the government had not yet disclosed the outcome of its step.
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The banks were simply not geared up for this major decision and the manner of implementation ‘exposed’ the union government’s lack of preparedness, he said.
Siddaramaiah also said RBI could have forseen the hardships faced by people due to demonetization of Rs 500 and Rs 1,000 currency notes and executed a plan to mitigate them.
“The entire cooperative sector crucial for serving farmers and rural folk, came to a stop,” he added.
This is the 12th budget presented by Siddaramaiah as Finance Minister in his political career during which he had served under the ministries of H D Deve Gowda and J H Patel.
Siddaramaiah said demonetization of large currency notes had a major adverse impact on the performance of revenue from stamps and registration account and as a result, the state government expected shortfall of almost Rs 1,350 crore during 2016-17 and to achieve Rs 7,750 crore by March end.
The revenue target of Rs 9,100 crore was fixed for 2016-17 and demonetization had a major adverse impact on the performance and from November 2016 onwards, the number of documents registered decreased by 25 per cent.
“As a result, we expect shortfall of almost Rs 1,350 crore and expect to achieve Rs 7,750 crore by March end,” he said.
“The revenue collection target for 2017-18 is fixed at Rs 9,000 crore, compared to Rs 9,100 crore fixed for the year 2016-17,” Siddaramaiah said.
The government has decided to rationalize Article 37 in the schedule of the Karnataka Stamp Act 1957 to boost tax collection and also tweak Article 20 (4) of the Companies Act in respect of amalgamation of companies, Siddaramaiah said.