Karnataka’s public debt rose 31.38 per cent between 2019-20 and 2020-21, the Comptroller & Auditor General (CAG) said in its report tabled in the Assembly on Tuesday, painting a grim picture of the state economy.
The burgeoning borrowings can be attributed to the government's excess borrowings to offset revenue deficits during the Covid-induced lockdown.
Karnataka's public debt was Rs 2.34 lakh crore at the end of 2019-20 fiscal, which increased to Rs 3.07 lakh crore by 2020-21.
Loans and advances from the Centre to the state also doubled during the period — from Rs 13,908 crore at the end of 2019-20 to Rs 26,617 crore 2020-21.
Among factors contributing to the increase in the state's loan burden is borrowing to the tune of 5 per cent of GSDP — around Rs 80,000 crore — in the previous fiscal. Moreover, falling short of GST revenue due to the pandemic, the Centre chose to offer GST compensation for states in the form of loans, increasing Karnataka's burden by around Rs 18,000 crore.
As a result, Karnataka's borrowing was close to Rs 1 lakh crore in the last fiscal even as its revenues witnessed a sharp decline.
Among state revenue sources that witnessed a sharp decline was state GST — from Rs 42,147 crore in 2019-20 to Rs 37,711 crore in 2020-21. Other major revenue sources for the state exchequer such as excise, stamps and registration fees and other taxes also decreased, the audit found.
"The indebtedness of the government increased by Rs 96,506 crore during the year, which is inclusive of off-budget borrowings of Rs 18,421 crore. The ratio of the outstanding public debt and other liabilities...works out to 23.06 per cent of GSDP," the report said.
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(Published 14 December 2021, 15:22 IST)
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