Karnataka budget shrinks as departments face major cuts

Chief Minister B.S Yediyurappa is likely to present the 2021-22 state budget in the first week of March. Already in the interaction between the department heads, the CM has made sure that the allocation of funds will be less due to the prevailing crisis.

Bengaluru: The pandemic has given a big jolt to the economic conditions of Karnataka about which the government has been transparent to all departments and has made it clear that "due to revenue deficit fund allocation will have cuts."

Chief Minister B.S Yediyurappa is likely to present the 2021-22 state budget in the first week of March. Already in the interaction between the department heads, the CM has made sure that the allocation of funds will be less due to the prevailing crisis.

Multiple sources from Government Departments have confirmed to ETV Bharat that there will be approximately 15-20 per cent cut in funds compared to last year's allocation.

Departments expecting a huge cut in allocation:
1. Kannada and cultural
2. Tourism
3. Law and parliamentary affairs
4. Labour
5. Food and civil supplies
6. Child and women welfare
7. Ports and fishing
8. Youth and sports welfare
9. Municipal administration

Departments to have minor cuts:
1. Minor and major irrigation
2. Home ministry
3. Revenue
4. Rural Development
5. Bengaluru development authority

Due to the prevailing Covid-19 situation, health and medical education will be gaining a huge chunk of the budget allocation.

Revenue deficit forcing State to cut funds:

Financial Year 2020-21 was full of lockdowns at multiple levels resulting in low productivity and decreased revenue collection.

Excise department stands as the winner as it has collected 6 per cent more revenue compared to the previous FY. Apart from the liquor, all other departments have resulted in a negative response in revenue collection.

As per the December data, the state had collected ₹66,346 crore in the form of taxes, which interprets that 11 per cent depletion compared to last FY.

Commercial taxes graph fell at 12.80 per cent, road taxes at 26 per cent, stamp and duties 18.56 per cent, other tax collections 17 per cent compared to last year.

Central tax sharing also has seen a 40 per cent slash, Center's Grant in Aid is also cut at 22.39 per cent, says finance department data. By March end it is expected that the State will have ₹6,500 revenue deficit, and the goal was to have ₹1.25 lakh crore revenue.