Karnataka facing unprecedented magnitude of economic difficulties: BS Yediyurappa

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Bengaluru, March 5, 2020: Karnataka is dealing with unprecedented financial difficulties following a Rs 8,887 crore discount within the state’s share in central taxes, minimize in allocation below 15th finance fee and a Rs 3,000 crore hit in GST compensation, Chief Minister BS Yediyurappa indicated on Thursday.

Presenting the state price range for 2020-21 within the Meeting, he mentioned Karnataka’s share in central taxes has come down by Rs 8,887 crore in 2019-20 as per the revised price range estimates of the central authorities.

Subsequently the state’s income assets have been lowered.

Other than this, Rs 3,000 crore GST compensation will even be lowered as assortment from the GST compensation cess will not be as anticipated, the chief minister mentioned.

“With all this it has turn into tough to achieve to achieve the 2019-20 price range targets and to handle this case throughout the bounds of the Karnataka Fiscal Accountability Act, an inevitable scenario has arisen this yr to chop down the expenditure of many departments,” he added.

As per the interim report submitted by the 15th finance fee, there’s a discount within the state’s share of central taxes to three.64 per cent in comparison with 4.71 per cent fastened by the 14th finance fee.

In view of this, there will likely be a discount of Rs 11,215 crore within the state’s share of central taxes in 2020-21 price range, when in comparison with the earlier one.

He, nevertheless, famous that the allocation advice of the 15th finance fee is restricted to 1 yr solely and the entire report for the interval 2021-22 to 2025-26 will likely be submitted in October 2020.

“Our authorities will quickly submit a revised memorandum to the fee to set proper the loss triggered to the state with regard allocation for the yr 2020-21 and provides extra allocation for the remaining interval,” the chief minister mentioned.

He additionally mentioned, when in comparison with the earlier yr, there is a rise of roughly Rs 10,000 crore for 2020-21 close to authorities workers wage, pension and curiosity on authorities loans, however there isn’t any proportionate enhance in assets as in comparison with dedicated expenditure.

“On account of this discount of the state’s share of central taxes as per the 15th finance fee report and different developments, critical difficulties are being confronted in useful resource mobilisation efforts of the state,” Yediyurappa mentioned.

“This magnitude of financial difficulties was by no means confronted within the earlier years by our state,” he added.

Nonetheless, the state’s personal tax income assortment is great throughout this yr, he mentioned.

As in comparison with the earlier yr, there’s a development of 14 per cent in State GST assortment.

“Primarily based on this, within the new price range, efforts are being made to handle the discount in share of central taxes by stabilising the state’s personal assets extra”, the Chief Minister mentioned.

Karnataka recorded a gross state home product development price of seven.Eight per cent in 2018-19 and Yediyurappa mentioned for the present monetary yr it’s estimated to be 6.Eight per cent.

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Courtesy: Global News Hut