Cuts in Central grants put extra burden on State: Siddaramaiah

Chief Minister Siddaramaiah on Monday said the State’s economy was on the right track and rubbished Opposition charges that the State was sinking into a debt trap.

Replying to a discussion in the Assembly on the budget proposals for 2015-16, Siddaramaiah said that the State was in a better position in resource mobilisation, repayment of interest and implementation of projects under plan expenditure compared to neighbouring states. The cut in grants pertaining to Central schemes to the tune Rs 1,987 crore for the next financial year had come as a setback to the State, but the government had decided to chip in for the shortfall.

Siddaramaiah said fiscal deficit in the budget is Rs 20,220 crore, which is 2.76 per cent of the Gross State Domestic Product (GSDP). The total liabilities of the State stood at Rs 1.5 lakh crore, which is 24.56 per cent of GSDP. The fiscal deficit was within three per cent and the total liabilities within 25 per cent of the GSDP as mandated by the Karnataka Fiscal Responsibility Act, he said.

A new methodology recommended by the 14th Finance Commission has resulted in “under-estimation” of the GSDP, the chief minister said. As per the new methodology, GSDP for the financial year 2015-16 has been fixed at Rs 7.36 lakh crore. The GSDP would have worked out to Rs 7.9 lakh crore if the previous methodology, which gives more weightage to Information Technology, had been retained, he said.

Giving a break-up of the cuts in Central government-sponsored schemes, Siddaramaiah said that the government will be receiving only Rs 8,146 crore from the Centre, down from Rs 16,626 crore as expected.

“This is a grave injustice to the State by the Centre. In schemes like mid-day meals, the Centre is giving us only Rs 347 crore as opposed to the expected Rs 1,229 crore for the financial year 2015-16. The same holds good for farmers’ scheme and drinking water schemes. Overall, we have to provide Rs 4,689 crore to ensure that the projects under these Central government schemes continue,” he said.

Later in the day, both the Houses passed the Karnataka Appropriation (Vote on Account) Bill, 2015, for Rs 49,316.34 crore, which allows the government to draw from the consolidated fund for a period of four months till July 31, 2015. The BJP members staged a walkout in protest against not being allowed to seek clarifications to the chief minister’s reply on the budget in both the Houses.