The 2020–2021 Karnataka Budget is quite high on promises but what is difficult to figure out from a detailed reading is the source of the resources to deliver on promises. There has been a slowdown in growth rate of Gross State Domestic Product by 1%, and the figure will, in all probability, be even lower for the upcoming year. So where the government gets the money to fulfil all the promises is to be seen, particularly since along with a reduction in the rate of growth of GSDP, there has also been a reduction in the state’s share in central taxes as well as GST compensation. Also, efficiency of tax collection by the state is an issue.
The budget, for a change, looks at Bengaluru specifically, and accepts its importance in the development and growth of the state. A number of faction points have been mentioned, but no clear direction seems to be given. Allocations have been made for solid waste management as well as conservation and restoration of lakes in Bengaluru, but no effort has been made to identify the issues and resolve them – thus, even if the money is made available, the real benefit can be questioned.
Further, the government has resorted to usual methods of revenue generation like increase in taxes for petrol, diesel, and alcohol, but these have limited effect and have been, in a sense, overused. The government had the opportunity to be innovative, which it did not utilize. On the whole, the budget is somewhat status quoist – there is some importance to Bengaluru as well as the rest of Karnataka.
R S Deshpande
Prof Sankarshan Basu, IIMB