From Our Special Correspondent
Daijiworld Meida Network - Bangalore

Bangalore, Dec 13: Karnataka is expected a shortfall of around Rs. 2500 crore in non-tax revenue receipts in 2011-12 on account of dip in mineral royalty following ban on iron ore mining and slowdown in the realty market.

The mid-year review of state finances report tabled in the Legislative Assembly on Tuesday by Chief Minster D V Sadananda Gowda indicated that realisation in non-tax revenues at the end of September 2011 (April-September) was Rs 1,339.99 crore, which is 36.5 per cent of the budget estimates of Rs 3,674.79 crore.

''On account of the ban on mining of iron ore in the State, a shortfall of Rs 400 crore is expected in mineral royalty”, the report said.

Though the real estate market has improved significantly, it has not yet reached the 2007-08 levels. Only Rs 100 crore is likely to be realised from the sale of land during the current year as against the budgeted Rs 2,000 crore, the report said.

Non-debt capital receipts are expected to be much lower than the budget estimates of Rs 2,061.72 crore.

''Overall, the expected shortfall in (non-tax revenue) receipts is around Rs 2,500 crore (for the full year),” the document said.

The total debt of the State is expected to cross Rs 1blakh crore and the government has sought the Centre’s permission to raise a fresh loan of Rs 10827 crore as Open Market Borrowings (OMB).

The total outstanding liability of the State Government stood at around Rs one lakh crore which is less than the stipulated 26 per cent of the total Gross State Domestic Product (GSDP) as mandated by the Karnataka Finance Regulation Act (KSFA).

The Government has proposed to raise an amount of Rs 10827 crore through OMB to meet its financial requirements.

However the Centre has permitted the State for raising the capital from the open market only for Rs 2,500 crore till date.

The mid-year position of receipts of grants in aid and contributions from the Centre stood at Rs 2405 crore against the budget estimates of Rs 8402 crore for the year. The achievement to budget estimates up to September 2011 is around 29 per cent against 40 per cent in 2010-11.

However, the State Own Tax Revenue (SOTR) consisting of four major state tax sources including commercial taxes, excise, motor vehicles and stamps and registration forecast a better performance.

The SOTR was estimated at Rs 43,817.10 crore in 2011-12 and the collection under during last six months was placed at Rs 21,569.51 crore reflecting a growth of 21 per cent over the corresponding previous period.

The Fiscal Management Review Committee (FMRC) headed by the Chief Secretary has reviewed the fiscal and debt position of the state andits progress on fiscal correction path.

The committee has suggested for moderating the additional commitments in the current year, identifying additional savings in existing budget provisions, prompting departments to maximize receipts of grants from the Centre and stepping up recovery of overdue loans and interest from boards, corporations and companies.