The tax collection with key departments has been strong except for exceeding the target of transport. However, this has not stopped the government from borrowing more. The total liability for 2022-23 is estimated to be around Rs 5.2 lakh crore, which is around Rs 4.6 lakh crore in the current financial year.
The tax collection with key departments has been strong except for exceeding the target of transport. However, this has not stopped the government from borrowing more. The total liability for 2022-23 is estimated to be around Rs 5.2 lakh crore, up from around Rs 4.6 lakh crore in the current fiscal.
Chief Minister Basavaraj Bommai said his government has been able to limit borrowing to Rs 63,100 crore as against Rs 67,100 crore projected for 2021-22. But, he proposes to borrow Rs 72,000 crore in the next financial year.
As per the limit fixed by the 14th Finance Commission, the outstanding liabilities of a state cannot exceed 25% of its GSDP (Gross State Domestic Product). Karnataka’s outstanding liabilities for 2021-22 stood at 26.9% of its GSDP in the wake of the Covid-induced slowdown, but rises to 27.5% for 2022-23 when a faster economic recovery is expected.
Bommai has promised that efforts will be made to bring down the debt-GSDP ratio below 25% in the next five years. What is worrying is that the state will spend more on unproductive interest payments as it will increase from Rs 27,161 crore in the current fiscal to around Rs 28,000 crore next year.
Bommai claimed that the government has been successful in borrowing through fiscal discipline and said that although the FRBM (Fiscal Responsibility and Budget Management) norms were reduced from 3% to 4% of GSDP, Karnataka has never achieved 4 Didn’t touch %. Bommai said, “We have borrowed Rs 4,000 crore less this year than anticipated and this can be achieved by reducing unwanted expenditure.
Economist M Govind Rao said borrowing is justified if the government spends money on infrastructure development.
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