Encouraged by an uptick in revenues and the easing of restrictions related to the Covid 19 pandemic, Karnataka Chief Minister Basavaraj Bommai on Friday increased allocations for the health and education sectors by one per cent for the 2021-22 fiscal year.
Presenting his first Budget, Bommai levied no new taxes. He labelled the Budget, which is still dependent on external borrowings in excess of Rs 70,000 crore, as one “formulated by a common man for the common people”.
In one of the key measures in the Budget, Bommai has increased the allocation for education from 11 per cent in 2021-22 to 12 per cent for the 2022-23 period, and for health from 4 per cent to 5 per cent. Rs 2.65 lakh crore of funds has been allocated for the current fiscal.
“In this budget, substantial increase in allocation for education, health and nutrition has been made by giving emphasis to human resource development. In this direction, new universities, model schools, Bengaluru Public Schools, Karnataka Institute of Technology, and new Community Health Centres have been proposed,” the Chief Minister said.
A total of Rs 31,980 crore has been allocated for education programmes and Rs 13,982 for health projects.
While Bommai’s predecessor B S Yediyurappa cited “economic difficulties of an unprecedented magnitude” and a reduction in the state’s share of central taxes to present a muted, no-frills budget in March 2021, Bommai said an increase in Central allocation and revenue collection helped in raising the allocations for education, health and the social sector.
Bommai’s Budget is a revenue deficit budget like the one of 2021-22. While revenues are estimated at Rs 1,89,888 crore, expenditure is expected to be Rs 2,04,586 crore. The deficit will, however, be lower than the previous year’s one on account of better management, Bommai claimed.
“The revenue deficit has been caused by Covid. Last year, it was a Rs 15,134 crore but now it has come down to Rs 14,699 crore due to better management,” Bommai said. The Karnataka CM added that the state needed to borrow only Rs 67,462 crore in 2021-22 as compared to a budget estimate of a Rs 71,462 crore borrowing.
“Government of India’s revenue collections have also increased in 2021-22, because of which the share of Central taxes to the state has gone up in the revised estimates to Rs 27,145 crore from Rs 24,273 crore as estimated in the budget. The Centre, in its budget for 2022-23, has estimated Rs 29,783 crore as tax devolution to Karnataka,” Bommai said.
He added: “The state GST collections have also increased in 2021-22. This shows that we are on the road to recovery. The Centre has supported the state by giving Rs 18,109 crore as a GST loan in lieu of compensation, in addition to Rs 7,158 crore as GST compensation for 2021-22.”
The Chief Minister also stated that in 2021-22, all sectors have shown growth as compared to last year. “The overall GSDP for 2021-22 at constant prices is expected to grow by 9.5 per cent.”
The Bommai budget has also proposed a slew of populist measures to cater to caste and religious groups in what is seen as an effort to draw support to the BJP for the 2023 state polls.
An allocation of Rs 500 crore to provide a diesel subsidy of Rs 250 for farmers to use mechanized tools for farming, creation of 69 new gashalas to protect cows, a cow adoption programme, an allocation of Rs 300 crore for a farmers’ health insurance schemes, distribution of Rs 24,000 crore of farm loans to 33 lakh growers under the existing schemes have been proposed.
Bommai said Rs 3,000 crore would be set aside to help improve the health, education and nutrition status in the 100-most-impoverished taluks of the state.
“It is a sensitive Budget because it has looked at environmental losses and has attempted to do eco- budgeting. We are the first government to do so. We are increasing the compensation for acid attack victims from Rs 3,000 per month to Rs 10,000 per month,” Bommai said. Among other “sensitive” initiatives are an increase in honorariums for Asha health workers and village helpers by Rs 1,000, an increase in monthly pension for unmarried and widowed women and gender minorities from Rs 600 to Rs 800, an insurance scheme for taxi drivers, and an increase in the honorarium for Anganwadi workers depending on their years of experience.
With an eye on small OBC groups who could prove decisive during the elections, Bommai said Sri Narayan Guru Residential Schools will be started in coastal Karnataka —a move that is seen as an effort to mollify the Billava community who have been cut up by the refusal of the BJP government in Delhi to allow a tableau of the saint Narayan Guru at the Republic Day parade.
“Rs 400 crore will be spent for the development of the backward communities, such as Tigala, Mali, Mali malagara, Kumbara, Yadava, Devadiga, Simpi, Kshatriya, Medara, Kunchi, Kurma, Pinjara / Nadaf, Kuruba, Balija, Idiga, and Hadapada through the Devaraj Urs Development Corporation,” Bommai added.
Reacting to the Budget, Congress party leader D K Shivakumar said it was “wishful” thinking on part of the Chief Minister as he has come up with something for which he doesn’t have the resources.
