Bangalore, Feb 14: India’s economic slowdown is having a cascading effect on Karnataka, as the state’s revenue receipts for fiscal 2013-14 are projected to decline by a whopping Rs.8,095 crore to Rs.112,422 crore from the budget estimate of Rs.120,717 crore.
“The state’s economy in this fiscal was influenced by the slowdown in the national economy and slow global recovery. As a result, the gross state domestic product (GSDP) growth rate is set to decline to 5 percent from 5.3 percent in the previous fiscal (2012-13) at constant prices (2004-05),” Chief Minister Siddaramaiah said while presenting the budget for 2014-15.
Siddaramaiah, who holds the finance portfolio, said the agriculture sector, however, recovered to post 3.6 percent healthy growth from a negative growth of 4.9 percent in 2012-13 due to severe drought and deficit rainfall across the state.
“But the industrial sector growth is estimated to be 1.2 percent this fiscal as against 4.4 percent last fiscal due to slow down, while the services sector, which contributes 60 percent of the GSDP, is projected to grow 7.2 percent as against 8.4 percent,” Siddaramaiah said in his two-hour-long budget speech.
Admitting that the economic environment continued to be challenging due to slow recovery in emerging market economies and slowdown in the national economy, the chief minister said growth in investment rate and in GSDP of the state would be dependent on improvement in the economy, removal of barriers, reduction in fiscal deficit and control of inflation.
Besides shortfall in tax receipts by Rs.934 crore to Rs.61,530 crore (revised estimate/RE) from the budget estimate of Rs.62,464 crore (budget estimate/BE), the state’s share of central taxes declined by Rs.1,081 crore to Rs.13,975 crore (RE) from Rs.15,056 crore (BE).
Grants from central government dipped by Rs.1,522 crore to Rs.14,906 crore (RE) from Rs.16,428 crore (BE) and non-tax revenue is projected to slip by Rs.159 crore to Rs.3,859 crore (RE) from Rs.4,038 crore (BE).
“As a result, gross revenue receipts for this fiscal (2013-14) are set to decline by Rs.3,716 crore to Rs.94,270 crore (RE) from Rs.97,986 crore (BE), with the opening balance turning positive to Rs.68 crore (RE) from a deficit of Rs.14 crore (BE),” Siddaramaiah pointed out.
Proportionately, the state government’s expenditure declined by Rs.3,185 crore to Rs.94,206 crore (RE) from Rs.97,391 crore (BE) leading to revenue surplus falling by a whopping 89 percent to Rs.65 crore (RE) from Rs.596 crore (BE).
Correspondingly, the budget estimates (BE) for 2014-15 will be Rs.281 crore, which is 53 percent less than Rs.596 crore BE in 2013-14.
Expenditure on social services declined to Rs.34,884 crore (BE) from Rs.37,735 crore (BE) and on general services to Rs.23,988 crore (RE) from Rs.25,643 crore (BE), while it has increased on economic services to Rs.29,004 crore (RE) from Rs.27,958 (BE).
The budget has estimated total receipts in new fiscal to be Rs.136,249 crore, including Rs.111,039 crore from revenue receipts and Rs.25,210 crore from capital receipts, while expenditure is estimated to be Rs.138,008 crore, including Rs.110,757 crore of revenue expenditure and Rs.20,490 crore capital expenditure, with Rs. 6,760 crore for debt repayment.
“Fiscal deficit is expected to Rs.20,041 crore, which is 2.92 percent of GSDP and within the stipulated three percent of GSDP,” Siddaramaiah added.