The Karnataka government is set to incur an additional expenditure of about Rs 3,000 crore during the remaining months of the present financial year to meet the funding requirements for various populist schemes and for purchasing power during the summer months.
For the present fiscal, the state government had budgeted an expenditure of Rs 66,250 crore and going by the trends of expenditure seen during 2009-10, the total expenditure may reach budgeted estimates as compared to Rs 60,655 crore, showing a rise 9.22 per cent over the previous fiscal.
According to the mid-term review of state finances, presented by chief minister B S Yeddyurappa in the state legislative assembly on Wednesday, the total expenditure (excluding loan repayment) during the first six months of the fiscal-ended September 2010 is to the tune of Rs 26,269.15 crore. This includes a revenue expenditure of Rs 22,110.73 crore and a capital expenditure of Rs 4,158.42 crore.
The total expenditure up to September 2010 was 39.65 per cent of the budget outlay compared to 37.08 per cent upto September 2009. During the first six months of the present fiscal, the plan expenditure has been stepped up to 34.11 per cent of the budget outlay compared to 29.96 per cent in 2009-10.
Although the plan expenditure has increased by 4 per cent of the budgeted outlay in the first six months compared to the previous year, the non-plan expenditure in the corresponding period has risen by only 1.3 per cent of the budgeted outlay. This was possible due to the better management of non-plan expenditure during the period, the report said.
The major additional expenditure is on account of the beneficiary-oriented schemes. As a result of the greater than anticipated increase in the number of beneficiaries, the outlay for schemes like food subsidy, social security pensions, bhagyalakshmi, provision of bicycle to students, incentive to milk producers and subsidy for concessional loans to farmers, have to be increased by approximately Rs 1,500 crore.
Further, due to the demand for electricity outstripping supply, the government has undertaken an aggressive capacity addition programme over the next five years. It is providing an additional Rs 500 crore over and above the budged amount for investment as equity in the power sector. In addition, an additional Rs 1,000 crore is being provided towards rural electrification subsidy as ordered by the Karnataka Electricity Regulatory Commission.
On the revenue collections, the report said the total revenue receipts for the first six months stood at Rs 25,326.76 crore recording a yearly growth of 27 per cent when compared to the similar period last fiscal.
The state’s own tax revenues stood at Rs 17,873.97 crore recording a yearly growth of 32 per cent. The mid-term review projects that there is going to be an excess realisation in commercial taxes to the extent of Rs 500 crore, motor vehicles taxes by Rs 200 crore, excise revenue by Rs 300 crore for 2010-11 fiscal. However, the government is expecting a shortfall of Rs 200 crore in the realisation of stamps and registration fee, which is primarily the real estate activity.
Overall, on the revenue side, the State government expects the collection of tax and non-tax revenues to exceed budget estimates by Rs 800 crore.
At the same time, there has also been a substantial increase in the interest payments touching Rs 2,364.91 crore for the first six months of the present fiscal as against Rs 1,955.65 crore in the comparable period of the previous fiscal.
