BENGALURU: Chief Minister Siddaramaiah, who is all set to start department-wise review meetings for the 2025-26 budget, is likely to chalk out a plan meticulously to draw the attention of the 16th Finance Commission to get revenue deficit grants from the Centre.
Sources told TNIE that he may not stick to presenting a surplus budget, but would showcase the gap in state’s revenue and expenditure to help get revenue deficit grants from the Centre based on the commission’s recommendations.
The 15th commission had recommended neighbouring states, especially Kerala for Rs 37,814-crore revenue deficit grant between 2020-21 and 2025-26, of which it received Rs 34.648, the sources said.
During the visit of the 16th Finance Commission headed by its chairman Dr Arvind Panagariya in August last, Siddaramaiah, who also holds the finance portfolio, presented a report on the state’s financial situation.
Highlighting Karnataka’s contribution of about Rs 4 lakh crore to the Gross Tax Revenue of the Union every year, the chief minister stated that the state gets only about Rs 45,000 crore in the form of devolution and about Rs 15,000 crore grant-in-aid. This means, for every rupee Karnataka contributes, it gets only 15 paise in return.
When he presents his 16th budget tentatively on March 14, he would project the actual revenue on one hand, and on the other expenditures soaring, according to sources.
“Siddaramaiah does not want to get a pat on his back by presenting a surplus budget, which would not help get Centre’s grants, instead would be pragmatic,” they said.
The outlay would cross Rs 4 lakh crore, an increase of 10-15 per cent over the 2024-25 budget which had an outlay of Rs 3.71 lakh crore.
2024-2025 budget was Rs 27,354-crore revenue deficit
There would be new tax on mineral-bearing lands, hike in royalty on minor minerals, apart from hike in excise duty for revenue generation and more stress would be on capital expenditure.
The special grants, as demanded by legislators, may feature in the budget, adding to the expenditure. Irrespective of their party affiliation, legislators wished that the expenditure on five guarantees be reduced by eliminating ineligible beneficiaries. But there would be no drastic cut as it would have a bad impression on the government, an official said. Of the Rs 3.7 lakh crore outlay for 2024-25, Rs 56,000 crore was earmarked for the five guarantee schemes.
Unlike his previous 14 budgets, which were revenue surplus, the budget for 2024-25 was Rs 27,354-crore revenue deficit.