Karnataka revenue declines by 50 percent for FY 2009February 20th, 2009 - 9:06 pm ICT by IANS
Bangalore, Feb 20 (IANS) The economic slowdown has severely impacted Karnataka, resulting in a steep 50 percent decline in its revenue surplus as against the budget estimates for this fiscal 2008-09 (FY 2009).
“The revised estimate of revenue surplus is Rs.767 crore (Rs.7.67 billion) as against the budget estimates of Rs.1,527 crore (Rs.15.27 billion) for 2008-09, which is a decline of 50 percent,” Chief Minister B.S. Yeddyurappa said Friday while presenting to the state assembly here the vote-on-account for fiscal 2009-10.
The revised revenue surplus accounts for 0.29 percent of the gross state domestic product (GSDP).
The main reason for revenue decline is a shortfall of Rs.31.11 billion in tax collections during this fiscal, especially in commercial taxes, stamp duty and registration, and motor vehicle taxes.
Against the budget estimates of Rs.318.76 billion, the tax realisation is pegged at Rs.287.65 billion in the revised estimates, which is a shortfall of 3.5 percent.
“Due to economic slowdown, collections from commercial tax, stamps and registration and motor vehicle sales have been less than the budget estimates. This type of shortfall, which is not only in the central taxes, but also in the tax revenue of several states, is a reflection of the national economic conditions,” Yeddyurappa, who also holds the finance portfolio, told the members in his 105-minutes budget speech.
Similarly, there is a shortfall of Rs. 8.31 billion in the state’s share of central taxes in FY 2009 from the budget estimates of Rs.79.82 billion to Rs.71.52 billion.
Grants from the central government are also lower by Rs.4.55 billion at Rs.49.96 billion from the estimate of Rs.54.50 billion.
As a result, the state has reduced its expenditure on economic services by Rs.20.62 billion to Rs.97.55 billion from the estimated Rs.118.16 billion; on social services by Rs.12.07 billion to Rs.159.32 billion from the estimated Rs.171.38 billion.
On the capital account, the state secured only Rs.4.04 billion for this fiscal against the estimated Rs.15.71 billion, a shortfall of Rs.11.67 billion.
Its net borrowings from the open market, however, shot up by a whopping Rs.46.46 billion to Rs. 78.45 billion from the estimated Rs.31.99 billion.
Though the state planned to borrow Rs.20.49 billion from financial institutions, the actual institutional borrowings fell by Rs.12.34 billion to Rs.8.15 billion.
With the capital outlay disbursements exceeding the budget estimates by Rs.15.95 billion to Rs.92.35 billion from Rs.76.40 billion, Yeddyurappa has projected a fiscal deficit of Rs.93.57 billion, which is 3.5 percent of the GSDP.
For the ensuing fiscal (2009-10), the minister has projected revenue surplus of Rs.11.51 billion and fiscal deficit of Rs.84.93 billion, which is 0.39 percent and 2.88 percent respectively of the GSDP.
The total revenue receipts are set to fall short by Rs.21.77 billion from the budget estimates of Rs.552.74 billion to the revised estimates of Rs.530.97 billion.
As a result, the total expenditure has been reduced by Rs.21.70 billion from the estimated Rs.553.13 billion to Rs.531.44 billion.
“After taking into consideration net of public account, the final deficit for this fiscal will be Rs.47 crore (Rs.470 million) as against the estimated Rs.39.50 crore (Rs.390.5 million),” Yeddyurappa said.