State govt to get less from central taxes this year too

State govt to get less from central taxes this year too

Karnataka gets 4.46 per cent of total tax devolution to all States

Last year the State government in its budget estimates for 2008-09 had anticipated Rs 7,982.38 crore in form of devolution of Central taxes, but ended up with only Rs 7,151.82 crore, a shortfall of Rs 850 crore. This was due to the shortfall of Rs 60,000 crore in gross tax revenue for the financial year 2008-09 estimated by the Union Government

As per the 12th finance commission recommendations, Karnataka gets 4.46 per cent of the total Central tax devolution to all states.

 The State government in its budget estimates for 2008-09 had anticipated Rs 7,982.38 crore in form of devolution of Central taxes.The trend seems to continue.

The State government in the budget estimates for 2009-10 has anticipated Rs 7,645 crore in form of devolution of central taxes.

This figure now look ambitious given that the Centre is anticipating only a marginal increase of Rs 14,000 crore (from Rs 6,27,949 crore in 2008-09 to Rs 6,41,049 crore in 2009-10) in direct Central taxes.

 The shortfall for the State, according to sources in the finance department, is calculated at around Rs 300 crore and comes at a time when the State’s own revenue generators - commercial taxes, excise, stamps and registration and motor vehicles tax-  are facing negative growth due to economic slowdown.

Some savings too

The State government is likely to save Rs 151 crore with the Centre’s decision to introduce a bill to enact a food security law that will provide 25 kg of rice or wheat at Rs 3 to each BPL family.

Presently, the Centre was subsidising foodgrains at Rs 3 per kg only to 12 lakh Anthyodaya families in the State.

However, now the Centre’s new initiative will cover as many as 31.29 lakh BPL families in the State. Some savings apart, the State government is unhappy.

Sources said the State will still be left with the burden of subsidising foodgrains for 65 lakh families costing the exchequer Rs 1,300 crore per annum.

Mismatch is due to the large number of families (96 lakh) which the State government has given the BPL tag. The State will have to continue to subsidise on providing foodgrains for these ‘additional’ families.

Asked whether his government would fulfil its promise to provide rice at Rs 2 per kg after the Centre assured to provide rice at Rs 3 per kg, Chief Minister Yeddyurappa replied in the negative. The Centre would provide rice at Rs 3 per kg only to 31.29 lakh families. The State government had issued ration cards to nearly one crore families.

He added that he has directed officers to identify those who have more than one ration card, and also those who have received cards by producing false income proofs.

NREGS

On the brighter side, the Centre’s decision to increase wages under National Rural Employment Guarantee Scheme will come as a succour to the State government.
The State was planning to increase wages from Rs 75 a day to Rs 96 under NREGS. It will now be borne by the Centre.

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