BENGALURU: The report of the Comptroller and Auditor General (CAG) of India on state finances for the year 2023-24, of Karnataka, made a startling revelation that the guarantee schemes reduced capital expenditure towards infrastructure by around Rs 5,229 crore.
Chief Minister Siddaramaiah presented the report in the Assembly on Tuesday. The reduction in capital expenditure also increased the number of incomplete projects to 3,140 from 1,864, and the funds aggregating to Rs 4,482 crore were locked up in the incomplete projects, it explained.
The government spent Rs 52,120 crore on the capital account, which was around 17 per cent of the total expenditure during 2023-24, a decrease by Rs 5,229 crore, when compared to previous year (Rs 57,349 crore).
The guarantees accounted for 15 per cent of revenue expenditure, which resulted in the increase in growth of expenditure (12.54 per cent from the previous year) which was the contributing revenue deficit of 9,271 crore. Consequently, the fiscal deficit of the state also increased from Rs 46,623 crore in 2022-23, to Rs 65,522 crore in 2023-24, it noted.
In order to finance the guarantees and the deficits arising thereof, the state availed net market borrowing of Rs 63,000 crore, which was Rs 37,000 crore more than last year’s net borrowings (Rs 26,000 crore).
The government had invested Rs 73,487 crore as of March 31, 2024, in government companies/corporations and the return from these companies/corporations was negligible (Rs 290.74 crore).
The borrowings exceeded the capital expenditure by Rs 38,160 crore and the amount was utilised for meeting the expenses towards the five guarantees, it said. The average GSDP growth (at current prices) increased at 11.84 per cent i.e., from Rs 16,15,827 crore in 2019-20, to Rs 25,67,340 crore in 2023-24. When compared to the previous year, the GSDP grew 13.10 per cent, it said.
During 2023-24, while the revenue receipts grew at 1.86 per cent, the percentage of revenue receipts over GSDP declined from 10.09 in 2022-23, to 9.09 in 2023-24.
When compared to the previous year, the total expenditure (revenue expenditure, capital expenditure and loans and advances) of the state increased by 8.34 per cent ie., from Rs 2,76,183 crore in 2022-23 to Rs 2,99,207 crore in 2023-24. Its ratio to GSDP decreased from 12.17 per cent in 2022-23 to 11.65 per cent in 2023-24, it explained.
Due to the lower growth rate of revenue receipts than the revenue expenditure, the state saw revenue deficit of Rs 9,271 crore in 2023-24. The fiscal deficit of the state increased to Rs 65,522 crore (2.55 per cent of GSDP) in 2023-24, from Rs 46,623 crore (2.05 per cent of GSDP) in 2022-23, it pointed out.