BENGALURU: Chief minister Basavaraj Bommai might be bound to promise developmental schemes by hiking capital expenditure in his budget as it comes just ahead of assembly polls. However, he has to rely on a mixed bag of central grants as the Centre has reduced allocation to some major schemes while increasing it for a few.
Also, 2023-24 is going to be the first year after the Centre stopped the GST compensation to states and Karnataka has to bank on its own. Tax collections in the state are looking robust, offering some respite.
While total funds expected from the Centre was Rs 52,281 crore, including devolution from tax pool and grant-in-aid (GIA) for centrally sponsored schemes, the amount Karnataka is going to get is marginally more thanks to positive growth in tax collection both at state and national level.
Karnataka will get Rs 37,252 crore (7% increase) from devolution for 2023-24 as against Rs 34,596 crore in 2022-23 and the cumulative GIA is expected to be slightly less than Rs 22,281 crore. Experts said Karnataka's share from the central pool would have been higher if not for the 15th Finance Commission recommendation to reduce the state's share to 3.6% from 4.7% earlier.
"The CM is expected to do a balancing act as he is compelled to leverage the growth in the state's own tax revenue while utilising central funds to the best," said Madhusudhan Rao BV, senior research advisor, Centre for Budget and Policy Studies.
However, the main impact on Bommai's budget is expected from the Centre's decision to change allocation pattern for centrally sponsored schemes (CSS) and reduction in subsidies. For instance, the Centre has proposed to increase allocation to PM Modi's pet project Jal Jeevan Mission (JJM) that envisages providing tapped water to rural areas from Rs 55,000 crore to Rs 70,000 crore (27.3% increase) in the 2023-24 budget. This is expected to result in more funds for Karnataka for the scheme.
Officials handling JJM said 63 lakh households have water connection so far as against the target of one crore. The state has spent Rs 3,705 crore so far, 50% of which came from the Centre, and Rs 1,336 crore is expected from the Centre this month.
"With the Centre increasing allocation for the scheme, we'll expedite works. We're aiming at completing the project by the end of this year," said Bommai.
The downer from the Union budget, however, is the 33% cut in allocation for the scheme under Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) - Rs 60,000 crore from Rs 89,400 crore.
While the concern is that this may result in steep reduction in person-hours, rural development and panchayat raj officials allayed fears saying given that the scheme is demand-driven, the state can get more funds if it spent more.
"The person-hour was increased from 13 crore to 16.3 crore last year as we showed progress," said an official.
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