Expert comment: Amid a lot of political turmoil, Chief Minister H D Kumaraswamy has presented the first full budget of his coalition government. The state government plans to spend Rs 2.34 lakh crore in the coming financial year, amounting to over Rs 34,000 per person in Karnataka.
Comparatively, the Union Budget amounts to about Rs 20,300 per person in India. Grants from the Union government to the state notwithstanding – it is the state government which spends money on most of the aspects that govern the daily lives of us as citizens, workers, retirees or students. State budgets deserve far more scrutiny than the national budget but rarely get the requisite deep analysis.
The chief minister has expressed his full confidence in meeting GST and other tax revenue targets set in the budget last year, but it is unclear whether that is indeed possible. The state is projecting only a 7.4% increase in overall tax revenues in the 2019-20 budget, indicating that tax revenues are not keeping pace with the economic growth of the state. The budget also estimates a full 20% increase in grants from the Union government for Centrally sponsored schemes, which may not materialise.
On the expenditure side, the biggest announcement in the budget speech is a plan to spend Rs 1.2 lakh crore on Bengaluru’s infrastructure needs – although it is unclear in what time frame this $16 Billion plan will be executed. This plan mixes problematic ideas like elevated corridors and expressways with long-overdue welcome ideas like suburban rail and integrated transit systems.
What is glaring is a missing economic vision for the rest of Karnataka. From farm loan waivers to a lot of sundry agriculture, industry and rural development schemes, the budget is littered with tweaks and increments.
This government has again failed to articulate a bold vision for an urbanising Karnataka. Every single neighbouring state but Karnataka has seen more decentralised urbanization, with multiple cities crossing the one million and two million marks in population. This budget was once again a missed opportunity for genuine regional development across Karnataka.
Going beyond the speech, the highest increases in budgetary allocation are for urban
development (38% over last year), industries (25%), power (22%) and water and sanitation (18% ).
The most glaring reduction in budget is for health – which is overall receiving Rs 9,700 crore, a 2% reduction over last year. This is happening alongside the launch of Arogya Karnataka, which subsumes the Ayushman Bharat mission and adds extra state budgetary resources to the tune of a total of Rs 905 crore, and expands the range of eligible beneficiaries.
Karnataka needs much higher investments on preventive health and primary healthcare, and these are necessary complements to a government-provided health insurance scheme for the poor.
(The writer is a Public Policy Researcher at Takshashila Foundation and host of the Thale-Harate Kannada Podcast)
