Chief minister has missed an opportunity

Achievement of comprehensive inclusive growth and an all-round development of Karnataka is the ambition of the 2014-15 budget as rightly spelt out by Chief Minister Siddaramaiah. A number of initiatives have been announced in the budget speech under various sectors.

 

The key issues to be discussed are: Is there any direction in the long list of government schemes and whether they are in line with the broad vision spelt out in the beginning of the speech. The focus seems to be more on announcing new schemes or enhancing allocations rather than spelling out a clear medium to long-term strategy to fulfill the ambition. 

 For instance, by way of a welcome measure, Siddaramaiah had announced Rs 50,000 crore investment for irrigation sector over a five-year period as soon as he assumed office as chief minister. The State is currently facing a number of challenges on the social and economic development front. The State’s rank in the human development index has slipped from seventh to tenth position, and the economic infrastructure is grossly inadequate to encourage private sector investment. 

Unfortunately, the State seems to have lost a good opportunity to address the serious challenges daunting the social and economic development by not announcing a focused budget to redress these challenges. 

The chief minister had a great opportunity to present a focused budget, given the State’s overall sound fiscal position as indicated by the broad fiscal indicators such as fiscal deficit, revenue resources, per capita plan and development expenditure etc. The current budget estimate proposes further increase in the plan outlay to the tune of 37 per cent.
 Karnataka also has the distinction of comparing very well with other states in terms of per capita plan and development expenditure. However, quite disappointingly, the State’s social and economic development does not compare well.

Certain budget proposals are retrograde for the State’s healthy development such as loan waiver that has now been extended to other categories such as Ashraya housing etc. The government should instead incentivise prompt repayment to encourage a healthy credit culture among people. Schemes like providing financial support for inter-caste marriages is not the State’s responsibility by any standard.

The budget proposals made for the current year under the revenue head and certain expenditure heads like social and community services seem to be unrealistic. This is in view of the fact that the revised revenue estimate for 2013-14 at Rs 94,270 crore has fallen short of the budgeted estimate at Rs 97,986 crore.

The budget proposal for revenue is Rs 1,11,038 crore for 2014-15, almost 18 per cent higher than the revised estimate. There has been a variation in the revised estimate of the social and community services also as opposed to the Budget estimate of Rs 37,734.85 crore in 2013-14 the revised estimate for 2013-14 is Rs 34,883.63 crore. The current budget proposes 14 per cent more allocation.

The declining revenue surplus is not very encouraging as the estimated revenue surplus of Rs 595.85 crore has dropped to Rs 64.55 crore which does not augur well in the context of inadequate capital infrastructure investments in the State. The focus in this budget too seems to be mainly on enhancing outlays rather than reflect on what the State’s achievements have been in terms of the outcomes.

(The writer is associate professor at Institute for Social and Economic Change, Bangalore)