Chief Minister Jagadish Shettar will present his maiden Budget — and the last one of the first-ever BJP government in Karnataka on Friday. The total outlay of the Budget, as already announced by the CM, will be around Rs 1.30 lakh crore compared to the Rs 1.10 crore presented by his predecessor D V Sadananda Gowda.
With elections round the corner, Shettar is expected to announce a string of populist programmes with zero-taxation proposals. But a 6 per cent fiscal deficit and slow growth will be challenges.
The state’s non-plan expenditure is likely to shoot up with the implementation of the Sixth Pay Commission report, which is expected to cost around Rs 800 crore. This apart, the government’s plan to waive around Rs 3,500 crore farm loans will put the state’s finances under pressure, forcing it to raise the ceiling on borrowings.
Shettar is likely to continue populist programmes like Bhagya Lakshmi, distribution of cycles to students, social security pensions and donations to religious institutions started by his predecessors.
Shettar, who is from North Karnataka, is expected announce schemes for the region and allocate funds for development by implementing the D M Nanjundappa Committee report on removing regional imbalances.
The state’s Economic Survey for 2012-13 predicted 5.9 per cent growth compared to 6.4 per cent in 2011-12.
“Being an election year, the Budget will be populist,” says Dr Abdul Aziz, visiting professor at the National Law School of India University. Increase in non-plan expenditure will be a major concern, opines Aziz.
“There is no need for lavish programmes like Global Investors’ Meet,” Dr Aziz said, adding that the government has to cut such expenditures to reduce non-plan expenditure and reduce fiscal deficit to 3 per cent.
Dr Narendar Pani, professor at the National Institute of Advanced Studies, says that the state’s economy has slowed down in the last two years. He, however, feels that even a political Budget with specific allocations addressing specific issues could be effective.