Karnataka’s Financial Position Sound, says Yeddyurappa
From Our Special Correspondent
Daijiworld Media Network

BANGALORE, MAY 5:  GETTING down to business or rather governance after a 45-day break for electioneering, Karnataka chief minister B S Yeddyurapa has already started reviewing the performance of various departments. After reviewing the position in respect for fertilizer and agricultural seeds for the ensuing monsoon season, the law and order situation as well as the situation caused by the indefinite strike by junior doctors which was thankfully called off by Monday night, the chief minister reviewed the financial position of the state, especially the tax mobilization drive.

Despite the recessionary trends, Yeddyurappa told reporters after the high-level meeting with senior government officials  on Tuesday that the state’s financial position was sound. The plan and non-plan expenditure for the year 2009-10 has been estimated at Rs. 58,860 crore and would be met without any serious cutbacks. He directed
officials to step up efforts to increase the enforcement and other regulatory measures to achieve more compliance and increase the state’s tax revenue.

The plan and non-plan expenditure in 2008-09 was Rs. 51, 918 crore, the chief minister said pointing out that the government expected to borrow Rs 8,493 crore during 2009-10. Yeddyurappa, who is also holding the Finance portfolio, said the state mobilized Rs 27, 477 crore under tax sources in 2008-09, an increase of 6% over 2007-08. In fact, the state ranked first in the tax collection during 2008-09 in the entire country with tax resources accounting for 11.5% of the Gross State Domestic Product (GSDP).

Andhra Pradesh, which stood second, had its tax  resources at 10% of GSDP, he said.

The state’s fiscal deficit has been restricted to Rs 8,424 crore in 2008-09 or roughly 3.35% of GSDP against the limit of 3.5 per cent fixed by the Centre. The State’s plan expenditure was up by 23.5% in 2008-09 compared to
2007-08 while non-plan expenditure increased by 5% during the same period. The plan expenditure in 2008-09 was Rs 19,960 crore against Rs 16,263 crore in 2007-08.

The  chief minister said the growth rate of commercial taxes increased by 7% while excise revenue went up by 20% in 2008-09 compared to 2007-08. The commercial taxes stood at Rs 16,641 crore in 2008-09 against Rs 15,552 crore in 2007-08 while excise revenue increased from Rs 4,767 crore in 2007-08 to Rs 5,739 crore in 2008-09. The motor
vehicle tax collection registered negative growth of 2% with the collection at Rs 1,617 crore in 2008-09 against Rs 1,650 crore while the stamp and registration fee registered negative growth of 15% with collection going down from Rs 3,409 crore in 2007-08 to Rs  2,908 in 2008-09.

"The recessionary trend, which is a global phenomenon, has affected the state’s economy also. But the impact is not that serious,"  Yeddyurappa said explaining that  the government had restricted the non-plan expenditure to some extent. The non-plan expenditure for last year was Rs 31,958 crore, which was 5% more than during 2007-08, he
added.