Ahead of elections, Bommai presents low-key budget despite spike in revenue collection

The BJP government, which hiked expenditure on health and education by one per cent last year (when Bommai presented a Rs 14,699 crore revenue-deficit budget), produced a Rs 402 crore revenue-surplus budget with expenditure on health and education kept at five and 12 per cent, respectively.

The 2023 budget estimates revenues to be at Rs 2,26,909 lakh crore and expenditure at Rs 2,26,507 crore. This is incidentally the first revenue-surplus budget since Covid-19 pandemic in 2020.

The 2023-24 budget, which will be in place till a new government is elected, has allocated Rs 37,960 crore for education and Rs 15,151 crore for health. In 2022-23 budget, Bommai had allocated a total of Rs 31,980 crore for education programmes and Rs 13,982 crore for health projects.

The total expenditure is estimated to be Rs 3,09,182 crore, including revenue expenditure at Rs 2.25 lakh crore, capital expenditure at Rs 61,234 crore and loan repayment at Rs 22,441 crore. The expenditure in the new fiscal is a 16 per cent increase on the Rs 2.65 lakh crore estimated this year.

“The buoyant revenues in FY 2022-23 has enabled me to propose a bigger budget for FY 2023-24 with the budget size crossing Rs 3 lakh crore for the first time in the history of Karnataka. I have succeeded in returning the state finances back on the path of fiscal consolidation and next year’s budget will be a revenue-surplus one, complying with all parameters of fiscal responsibility,” Bommai said.

The major populist announcements in the budget include an increase in the limit on interest-free loans for farmers from Rs 3 lakh to Rs 5 lakh to benefit 30 lakh farmers and a scheme for additional subsidy of Rs 10,000 for farmers with Kisan credit cards to benefit 50 lakh farmers.

Bommai also announced an increase in the revolving fund for Minimum Support Price to farmers from Rs 2,000 crore to Rs 3,500 crore. “I am happy to inform you that this will be the highest revolving fund for MSP in the history of the state,” he said.

Among the other key announcements in the budget is creation of a Rama Mandira in the Ramanagara region of the state. There is no allocation announced for the project. The temple will come up on a hill in the Ramanagara district in the Vokkaliga belt where the BJP is politically weak. “Budget allocation for the proposed Rama Mandira project at Ramanagara will be done after a detailed project is prepared,” Bommai said.

Keeping in line with the practice of BJP governments in Karnataka, Bommai has allocated Rs 1,000 crore for development and renovation of temples and mutts in the state for the next two years. In 2022, he had allocated Rs 425 crore for the purpose.

The state recorded an economic growth of 7.9 per cent in the current fiscal, according to the economic survey report, with service and industrial sectors being the main contributors. The economic growth was recorded at 7.2 per cent last year.

The state recorded a 26 per cent increase in GST collection and a 21 per cent increase in collection of the state’s own taxes in 2022-23, Bommai said. “The total revenue receipts in 2023-24 is Rs 2,25,910 crore, which is an increase of Rs 36,022 crore (19%) compared to the previous year,” the Chief Minister said.

Reacting to the budget, leader of the Opposition Congress and former chief minister Siddaramiah said the BJP government has fulfilled only 57 per cent of the promises made in the 2022-23 budget and 90 per cent of 600 promises made in the BJP manifesto ahead of the 2018 polls still remain unfulfilled.

Leader of the Opposition Siddaramaiah and other Congress leaders came to the Assembly with saffron flowers tucked behind their ears, alleging that the BJP government had “made a fool of the people of Karnataka” by not fulfilling promises from the previous budget and those in the 2018 manifesto.

Siddaramaiah termed it the “exit budget” of the BJP. He accused the Bommai government of “pushing Karnataka into a debt trap” by doubling the state’s total liabilities from Rs 2.42 lakh crore when the Congress was in power in 2018 to Rs 5.64 lakh crore at present.

Bommai hit back saying it was the Congress government that pushed liabilities in the range of Rs 2 lakh crore in the non-Covid years. “The total outstanding liabilities is expected to be Rs 5,64,896 crore by March 31, 2024 and as a percentage to GSDP is estimated at 24.2%, which is within the limit of 25% prescribed under Karnataka Fiscal Responsibility Act,” said the CM.