BENGALURU: Chief Minister Siddaramaiah on Wednesday said that though he could meet two parameters of the Fiscal Responsibility and Budget Management (FRBM) Act by maintaining total liabilities below 25% of GSDP at 24.94 per cent and fiscal deficit at 2.95%, he could not make his budget revenue-surplus. In his reply to the debate on the budget, he strove to prove that he has maintained fiscal health better than the neighbouring states in the South and also the Centre.
He blamed the Centre’s noncooperation for presenting the revenue-deficit budget because of GST rate rationalisation mid-term, which resulted in a loss of Rs 10,000 crore in 2025-26 and estimated to cause Rs 15,000 crore loss in 2026-27. “Except for some buyers of cars and motorbikes, the rate rationalisation has not helped the rest.
The GST growth has declined to 4% from 10%,” he said. The centre not releasing its share of Rs 19,000 crore against the Jal Jeevan Mission (JJM) programme added to the fiscal stress, he said.
On his predecessor Basavaraj Bommai presenting a revenue-surplus budget in 2022-23, Siddaramaiah attributed it to the state then receiving the GST compensation for five years at one go. Since 2023-24, the compensation was stopped even as seven states, including Karnataka, resisted and demanded that the compensation be continued.
He said that though Rs 4.50 lakh crore tax is collected from the state, only 14% comes back from the Centre. He added that 4.713% share in tax devolution recommended in the 14th Commission was reduced to 3.647% in 15th FC.
He mentioned that Rs 5,300 crore announced by the Centre for the Upper Bhadra project in the 2023-24 budget was also not released. He suggested that an all-party delegation should be taken to the Centre to demand the state’s share.
Turning tables on fiscal discipline, he said the Centre’s fiscal deficit was projected at 4.3% and liabilities at 55.6% of GDP, exceeding the recommended thresholds under FRBM Act.
“When Modi became Prime Minister in 2014, the liabilities were at Rs 53,11,000 crore, but since then, it has increased to Rs 218 lakh crore. During his tenure, Rs 165 lakh crore of debt has been incurred. Modi has pushed the country into debt. This year, Rs 16,96,000 crore of debt was incurred. The liabilities should be 40% of GDP, but it has increased by 56%,” he alleged.
He said the state’s fiscal deficit stood at 2.95% against Maharashtra’s 3 percent, Andhra Pradesh’s 4.5%, Kerala’s 3.8% and Tamil Nadu’s 3.5%.