No scope for new schemes: Mid-term fiscal plan

Even though the Basavaraj Bommai-led state government has presented a budget that is close to Rs 20,000 crore bigger than the previous year and the chief minister expressed optimism about it, the government is unlikely to be in a position to take on new big-ticket projects in the immediate future.

For, the Medium Term Fiscal Plan (MTFP) for 2022-26 has cautioned the government against new government schemes.

“Expenditure rationalisation is the need of the hour. The revenue receipts are almost fully made use of, to fund the committed expenditure, leaving limited scope for new government schemes,” the MTFP states.

What the MTFP talks about is how the government has hit a revenue deficit stage, owing to the impact of the Covid-19 pandemic.

In order to fight the pandemic, the state had to give more funds to health-related expenses, in addition to the regular expenditure commitments.

Restrictions on mobility and economic activities further strained the revenue receipts, it says, while pointing out that the state will have to depend more on borrowings because of this situation.

The MTFP asks the government to take measures to contain revenue expenditure, as growth in revenue receipts may not change much in the immediate future.

If the state has to get back to a revenue surplus phase, these measures are imperative.

Check out the latest videos from DH: