JOIN USWhile Chief Minister Siddaramaiah claims to fulfil promises in the Congress manifesto in the coming years, the Medium Term Fiscal Plan (MTFP) 2013-17 says that the government is left with little scope for taking up new development initiatives, unless it prunes less-productive programmes and reviews unfunded and partially-funded commitments.
“The KFRA (Karnataka Fiscal Responsibility Act) limitations make it imperative that unfunded and partially-funded commitments are reviewed and yet-to-start and less-productive spending programmes are rolled back. Else the fiscal position of the State will continue to be in a stress, leaving little scope for development initiatives and thereby stifle future growth prospects,” the MTFP, submitted in the Legislative Assembly along with the 2013-14 revised budget on Friday, stated while analysing the growth prospects and road ahead for the State economy.
Siddaramaiah had claimed that 60 of the total 160 promises made in the Congress manifesto have been included in the budget and assured that others will be implemented in the coming years. He had also said there was no resource crunch and he would mobilise funds to implement all the promises.
The MTFP has, however, said the immediate challenge of the government is to find steady source of revenues to provide for enhanced outlays in socio-economic sectors. Though the plan size has been increased and budgetary allocations made for various populist schemes, including the Re one per kg rice scheme, the additional resource mobilisation is estimated to be only Rs 1,452 crore. Siddaramaiah, who holds the Finance portfolio, has confidently pegged the State plan size at Rs 48,685 crore for the current fiscal – Rs 1,685 crore more than what the Union Planning Commission had fixed recently for the State. The annual subsidy bill is estimated to be a whopping Rs 14,800 crore.
The MTFP, further, has expressed concern over steady increase in allocations to multitude of subsidy and beneficiary oriented schemes over the years. “These schemes being largely financial support based or subsidy based schemes are revenue in nature. Any large allocations here impact the revenue balance...The challenge lies in ensuring that these subsidies to the tune of over Rs 14,800 crore do not become a permanent source of additional support and thereby deter these sectors from undertaking reforms,” the Plan stated.
Another area of concern for the State economy, as per MTFP, is decrease in capital expenditure in the last few years – from four per cent of Gross State Domestic Product (GSDP) in 2010-11 to 3.02 per cent in 2012-13 fiscal year. In the revised budget for 2013-14, it is pegged at 3.06 per cent (Rs 18,380 crore) – a marginal increase compared to last year.
“In future, the State has to work towards raising its non-debt capital receipts and reducing its consumptive revenue expenditure and thereby spend more on creation of capital assets,” the MTFP said.