Daijiworld Media Network - Bengaluru (SP)

Bengaluru, Jul 18: The state government led by chief minister B S Yediyurappa is hard hit by the dismal taxes and revenue collections that have devastated its finance management plans. To balance the lopsided position, it has raised Rs 8,000 core from the Reserve Bank of India during the first quarter.

During the last three months, the state has raised state development loans seven times. The finance department sources said that this is the first time that the state had to raise so much funds during the beginning of the financial year.

As against the monthly tax collection of Rs 9,333 crore, Karnataka got only Rs 6,268 crore. As such, it has suffered a deficit of about Rs 9,000 crore.

For the first time in the year, Karnataka raised Rs 1,000 crore loan on April 7. Thereafter, different amounts were raised with an interest of between 5.7 percent and 7.93 percent. The sources said that the loans have been raised at low rates of interest and the loans borrowed are within the limit prescribed in the budget.

The state has no other option but to raise loans to balance the expenditure with income. As expenditure for salary of employees, pension, various subsidies, medicines for coronavirus infection and equipment are mounting sharply, the state is under compulsion to raise loan.

As at the end of June, collection of commercial taxes stood at Rs 13,245 crore, excise Rs 3,846 crore, motor vehicles Rs 571 crore and registration and stamp fee Rs 1,141.44 crore.