Karnataka needs Rs 2,123 cr for rural development: CM

Karnataka chief minister Dharam Singh has stated that the state requires Rs 2,123 crore for rural development in the state. He also called for a fresh formula for sharing the central funds with other states.

He further added that the Centre should provide financial assistance to the state government for capacity building and strengthening the Panchayat Raj institutions.

Detailing the issues, Dharam Singh said that among the programmes for which the central funds were required included Rs 500 crore for rural drinking water supply schemes, Rs 240 crore for rainwater harvesting and watershed development, Rs 1,000 crore for employment-guarantee sch-emes to provide at least 100 days of employment to the rural poor, and Rs 283 crore for the 5,650 Gram Panchayats in the state.

Commenting on how the assistance should be funnelled, he said: "The Centre should provide financial assistance to the state government for capacity building and strengthening of Panchayat Raj institutions. Allocation of funds scheme wise by Union Ministry for Rural Development and the Planning Commission should be stopped."

Singh further said that there was a need for a paradigm shift in the thinking, planning and approach towards rural development. "We should not view rural people as mere beneficiaries of the schemes and we should know that they have a right to development and a right to develop themselves," he said.

A spokesperson for the finance ministry, government of Karnataka, said: "The state government has sought drought-proofing through farm level interventions in rain-fed areas and massive infrastructural inputs for spreading the irrigation potential."

On the fiscal side, he said that Karnataka is enthused by the experience of Haryana on the implementation of modified VAT.

"We expect that a fair and revenue-friendly as well as a business-friendly VAT will be adopted as soon as possible. At the same time, we hope that the Union Budget will make adequate provision for compensating the states not only for VAT losses but also to the extent of expenditure incurred to create VAT capability," he said.

The spokesperson further said: "To enable egalitarian development and to deepen the entitlements for ensuring high growth, the infrastructure facilities in rural areas must be strengthened. Accordingly, concentrated effort is required to improve wide ranging infrastructure in rural areas "� roads, rail network, telecommunication, construction, marketing etc "� in a mission mode. It is our experience that wherever the government steps in to improve infrastructure and create entitlements, private enterprises are capable of rapidly enhancing development."

He said that Karnataka, being a reform-oriented high growth and development/investment-friendly state, expects that the Union Budget will be oriented towards long-term growth, development and improved public finance.

"To this end, we hope that the reform efforts of efficient states are recognised and supported. Sustainability in public finance by reducing revenue deficit and ensuring that the fiscal deficit is incurred mainly for capital expenditure and reduction in wasteful expenditure along with rightsizing of government, quality improvements in government through information technology, rationalisation and restructuring and roll back of public sector from areas of private competence, are the expected areas of emphasis in the realm of fiscal reform," the spokesperson said.

On the issue of service tax, he said that the state government eagerly awaits an announcement to allow the states to tax services, an inevitability which is better achieved sooner or later.

In the context of service taxes, he added that Karnataka expects that due care will be taken to enhance the revenue of states by allocating those services to it which are buoyant, locally produced and provided on the basis of local infrastructure.

He further added that the state government also expects that due flexibility will be given to levy, collect and retain service taxes.