BENGALURU: With a BJP government in the state and the party heading at the Centre, Karnataka’s hopes are sky high ahead of the Union Budget 2020-21. Why not?
After all, 25 out of the total 28 Lok Sabha members from Karnataka belong to the BJP. Four MPs from the state are ministers in the Union cabinet, including Finance Minister Nirmala Sitharaman who is a Rajya Sabha member from Karnataka.
With Pralhad Joshi (Parliamentary Affairs), DV Sadananda Gowda (Chemicals and Fertilisers) and Suresh Angadi (Minister of State for Railways) in the union government, Karnataka seems to have all the right cards.
On February 1, when Nirmala walks into Parliament house with budget documents, Karnataka, battered by severe floods, hit by droughts and choked by financial crunch, will look to the Union government for a ‘thank you’ note after strengthening the Narendra Modi-led NDA in the last parliamentary elections.
Karnataka’s estimate of the devolution of funds from the Union government for 2019-20 was Rs 39,806 crore as indicated in the Vote on Accounts presented by the then interim finance minister Piyush Goyal in February last year. But soon after the elections, Nirmala, while presenting the budget on July 5, indicated a devolution to Karnataka at Rs 38,134 crore which was Rs 1,672 crore lower.
Between April and November 2019, the Centre released Rs 19,914 crore as devolution, according to State Finance Department records. During the same period, the grant-in-aid (GIA) and other contributions from the Centre stood at Rs 22,667 crore -- about 70.27 per cent of the total estimate of Rs 32,257 crore.
While the opposition is sceptical, the state government is optimistic and it will be happy if the budget meets the statutory commitments like devolution of funds as directed by the Finance Commission and GST compensation. GST compensation due will add up to Rs 6,500 crore for October-January if payments aren’t processed before the budget.
“BJP is already in power at the Centre and if people vote in favour of the party in Karnataka as well, we will ensure development at double the speed. We will get more funds,” Chief Minister B S Yediyurappa had claimed on multiple occasions during his campaigning for the December 5 by-elections to 15 assembly constituencies.
The state has already put forward its wish-list to the Union government. From suggesting the setting up of an AIIMS to the allocation of funds to complete Phase-II of Metro rail construction and better support prices for crops, the government has conveyed its expectations to the Centre.
"Since our party is in power at both the levels, we are hopeful that we will get a good share of central funds. Our priorities include Bengaluru suburban rail, completion of Metro phase-II for a better connectivity and allocation of funds or announcement of new housing projects, especially in flood-affected areas. We also want the health sector to be given more importance with the announcement of an AIIMS in Karnataka," Sadananda Gowda said, listing out the key points of his discussion with Yediyurappa on the Union budget expectations.
Yediyurappa, in particular, is more keen on a bigger allocation for irrigation projects to boost farming activities. "His suggestion has largely been pro-farmer including a higher allocation for the sector and boost in support prices," said an official in the Chief Minister’s Office.
After raising its voice against the Centre’s attempts to cut down on funds for centrally sponsored schemes in lieu of increased devolution of funds as per the 14th Finance Commission report, the opposition in Karnataka is apprehensive about whether the Union government will keep its statutory commitments, leave alone gifting goodies to the state.
"Although the delay is hurting us, GST compensation will materialise at some point, but reducing funds under devolution committed to us is a gross injustice. The cumulative reduction amounts to Rs 7,000-8,000 crore," pointed out Krishna Byregowda, former Rural Development and Panchayat Raj Minister and former member of the GST Council.
The 14th Finance Commission directed a horizontal share of 4.71 per cent of the total Rs 39.48 lakh crore under devolution to Karnataka for a period of five years between 2015 and 2020. The unusual extension of deadlines for the 15th Finance Commission’s report is also a matter of concern.
"The Centre has cut back on funds for centrally sponsored schemes including Sarva Shiksha Abhiyan... Karnataka hasn’t received any funds under Pradhan Mantri Gram Sadak Yojana (PMGSY) Phase III. Funds for rural drinking water supply schemes have dropped tremendously from Rs 1,500 crore in 2014 to Rs 300 crore now. Money for MGNREGS has been cut," Krishna Byregowda said.
The Centre owes Karnataka Rs 1,521.53 crore under MGNREGS as wages, material and administration costs as well as reimbursement as on January 22. Despite what the balance sheets say, BJP leaders in the state appear to think otherwise.
"Before criticising the government, we should remember that the 14th Finance Commission raised the devolution of funds by 10 per cent. We are getting more funds from the Centre in lumpsum. There might be a few areas where the Central funds have been cut down, but allocations have been increased for schemes like PMGSY, MGNREGS and PMFBY. Funds have been cut in a few areas because works have been taken up on priorities in other regions," said Sadananda Gowda.
Karnataka expressed fears of a reduced devolution of funds in October last year. The mid-year review of state finances for 2019-20 presented in the state legislature said the Union government’s eventual decision to reduce Corporate Income Tax had the potential to adversely impact the devolution as the divisible pool of taxes could come down.
Battered by severe floods, hit by drought and choked by financial crunch, Karnataka will look to the Union government for a ‘thank you’ note after having elected 25 BJP MPs to strengthen the Narendra Modi government
From suggesting setting up of an AIIMS to the allocation of funds to complete the Phase-II of Metro rail construction and better support prices for crops, the state government has conveyed its expectations to the Centre.
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