CM begins pre-budget exercise these days, says Centre not giving enough funds The Karnataka-Centre impasse over fund devolution looms large as chief minister HD Kumaraswamy begins the budget preparation exercise on Wednesday. The CM, who claims the grant-in-aid and devolution of funds from the Centre not matching expectations, can hold department-wise pre-budget conferences with ministers and department heads involved.
The state was expecting Rs 36,215 crore from the Centre under tax devolution in 2018-19, however, got only Rs 22,870 crore. The Centre was expected to release grant-in-aid to the tune of Rs 26,179 crore, however, only Rs 17,206 crore has been allotted.
“The state is scrambling for resources to fund welfare schemes in spite of prodigious revenue target. This is often mainly thanks to the slowing down of fund result the Centre. The response to our reminders to has not been encouraging,” the CM, who is predicted to table his second budget tentatively on February 8, told TOI. Sources said a road map for the budget is being ready by a team headed by Dr S Subramanya, economic authority to the CM, and the outlay for 2019-20 is predicted to hover around Rs 2.35 lakh crore. it absolutely was Rs 2.18 large integer for this financial.
“According to the 14th finance commission’s award, the states must get 42 of devolution from the tax pool, however, Karnataka isn't obtaining that abundant. Thus, the state is facing the dearth of funds despite buoyant revenue earnings,” an official said. “On the one hand, they drastically reduced GST rates because of that there has been large revenue shortage for the state. I requested Union finance minister Arun Jaitley to increase the compensation amount by 3 years beyond 2022, however, there's no response to the present. The funds for the central schemes have also been delayed,” the CM alleged.
With a quarter to travel for the end of this fiscal, the state had raised Rs 51,589 large integer (77%) from industrial tax against the annual target of Rs 66,920 crore by December-end. beneath different heads, the state has achieved over 75 of the target to this point.
“We might exceed the target of Rs 95,821 crore through assembling. however the question is can it's sufficient once the central help isn't up to expectation,” said the official. Sources said as a significant portion of the revenue goes to crop loan release that calls for no less than Rs 44,000 crore, no such scheme may be expected currently though farmers are in distress due to droughts throughout Kharif and Rabi seasons.
“There is not any want for a fresh loan discharge. We’re thinking of different means that as well as market reforms to support farmers,” said the CM.
On its half, the Centre sought-after to justify its stance by arguing that it's only following the procedure in terms of paying compensation for GST loss and devolution of funds. “There’s no scope for the state to air any grievance. The compensation is being paid as per the norm. The CM has requested for extension of the compensation amount, however, it calls for a Constitution modification,” Ritvik Ranjanam Pandey, joint secretary to the department of revenue, the government of India, said.
The opposition BJP isn't buying the government’s claims. “The drawback with the Karnataka government is that it never submits utilization certificate on central grants on time. The Centre releases succeeding funds only when obtaining the utilization certificate for the funds spent. there's no purpose in blaming the Centre while not following the due procedure,” said Gopalakrishnan Agarwal, BJP national spokesperson on economic affairs.