 "Karnataka to seek relook at cut in central grants")
The net loss estimated to the state during this year, due to the increase in the Central devolution on the one hand and reduction of Centre’s support to CSS; severe reduction in the quantum of grants to state’s specific schemes by Finance Commission and on account of methodology in arriving at the GSDP on the other hand is Rs 1,987 crore to the state, chief minister Siddaramaiah said.
Replying to the Budget discussion at the state legislative assembly, on Monday, the chief minister said he would be meeting the Prime Minister Narendra Modi and Finance Minister Arun Jaitley very soon to request them to take a relook at the reduction in grants to state government.
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“The Central government has given in one hand and taken it back from the other. I have already discussed the matter with Arun Jaitley once and raised my concerns. I will meet him and the prime minister very soon and convince them to take a relook at the reduction in central grants to various central schemes,” Siddaramaiah said.
He said the state government would get Rs 24,790 crore by way of Central devolution in 2015-16, a growth of 49.6 per cent compared to Rs 16,560 crore in 2014-15. At the same time, it would get Rs 8,146 crore for the central sector schemes in 2015-16 as against Rs 16,626 crore in 2014-15, which is 51 per cent less than FY15.
The state government will have to spend from its pocket for schemes like Mid-Day Meal and ICDS, RKVY, National Rural Drinking Water Project among others. “The net effect is that what has been given by the Central government on the one hand has been taken away by the other hand. The state has to increase its share in most of the Central Sector Schemes thereby negating the benefit of higher devolution,” Siddaramaiah said.
The chief minister also expressed concern over the new methodology of Central Statistical Organisation (CSO) for estimation of Gross State Domestic Product (GSDP), which has adversely affected the state. This methodology has grossly undervalued the contribution of IT sector in Karnataka, he said.
“The Gross Value Added (GVA) of IT sector in Karnataka has been assumed by the CSO at only 15 per cent to 16 per cent while the State’s share of software exports is around 33 per cent to 35 per cent. This has led to under estimation of State’s GSDP figure,” Siddaramaiah said.
Since the borrowing capacity of the state is measured as a proportion of GSDP, the borrowing capacity has come down substantially on account of this revised methodology, he said.
This has also affected the Budget size of the state for next fiscal, he said adding it would have been higher by Rs 5,000 crore. Karnataka’s plan size for 2015-16 has gone up by 10.66 per cent to Rs 72,597 crore. When compared to many other states, only Gujarat has got slightly higher plan size with a rise of 10.90 per cent, he added.
Rejecting opposition BJP's charges, Chief Minister Siddaramaiah today said the state's fiscal deficit was within the norms and the GDSP saw a growth of seven per cent for 2014-15. "I do not claim that the budget is robust, but we are within the parameters of fiscal responsibilities act," Siddaramaiah, who also holds the Finance portfolio, said in the assembly replying to the debate on the budget presented by him on March 13.
After his reply, the House passed vote on account for first four months commencing from April 1, 2015, fulfilling constitutional requirement as the budget was yet to be passed.