Karnataka budget 2022 growth oriented of the hour As Karnataka CM Basavaraj Bommau gets set to present his budget he

Karnataka budget 2022 growth oriented of the hour

As Karnataka CM Basavaraj Bommau gets set to present his budget he must look at shunning populism and focus on growth (Photo credit-PTI)
A budget is a very crucial financial document.
It spells out the intent and ability of a government or an elected body to meet the aspirations, hopes and dreams of the people who are governed by the said elected body. Karnataka is now all set for another state budget being presented. This budget would be for the year 2022-23 and will be presented by the state's chief minister, Basavaraj Bommai who also holds the finance portfolio. The state budget assumes added significance as the state will go for assembly polls in 2023 when the term of the current legislature comes to an end.
Like many of its peers, Karnataka too was hit severely by the pandemic. The first wave of COVID-19 infections impacted the revenue receipts forcing the government to cut back on capital expenditure and forcing it to go in for increased borrowing to meet its fiscal commitment.
The need to control or reign in wanton expenditure thus becomes a crucial part and parcel of the budget.
However, while everyone agrees that this is not the time for fiscal profligacy, there is a disturbing sign. Recently the Karnataka legislature passed the Karnataka Ministers Salaries and Allowances (Amendment) Bill, 2022 under which the salaries paid to CM and ministers will receive a 50 per cent rise in their salaries. Similarly, the Karnataka Legislature Salaries, Pensions and Allowances (Amendment) Bill, 2022 has proposed a 50 per cent hike in salaries of MLAs, MLCs, Speaker and Deputy Speakers, Council Chairman and Deputy Chairman.
The new salaries will become payable from April 1, 2022. But now comes the interesting bit as the bills propose to hike the salary once every five years!
It is estimated that with regard to the CM and ministers, the additional burden would be ₹25.4 crore while in case of MLAs, MLCs and the like it would be to the tune of ₹67 crore.
"Karnataka's fiscal position isn't that strong on the back of the pandemic. Such expenditure (hiking salary of CM. minister and legislators) should have been deferred. That would have been a prudent move," said an analyst.
A please-all budget
CM Basavaraj Bommai would also be acutely aware that CY2023 is an important year, it is an election year. Obviously, the budget for fiscal year 2022-23 has to be loaded with goodies and benefits for the voting public. All this means that you can't be parsimonious with your purse. It also begs the question of how the government is going to raise additional resources.
Targeted spending
One possible way is to ensure targeted spending. While it may be tempting to have a please all budget, it is ultimately the quality of spend that matters.
Farmer leaders who spoke to News9 said that the government has to possibly present a status paper on the implementation of various government schemes for the farm sector. Such a status paper would clearly indicate whether the monies meant have been spent for the specified purpose or not. Such an exercise can also prevent duplication of schemes and allocations.
Augmenting revenue
If the state has to spend more on various schemes, then it needs the revenues. The government is expected to tap into non-tax revenues (like collection of fines).
But there is a plethora of options available with a state asset monetisation scheme on the lines of the National Monetisation Pipeline which is expected to help the Union government garner nearly ₹6 lakh crore by leasing out core assets.
Such a move could mean that state highways could also be offered to bidders who could operate these facilities collecting toll from the users.
Similarly, there could be a case being made for stake sale in the ESCOMs or electricity supply companies. But stake sale would necessitate a new investor whose investment decisions would be necessarily driven by returns not based on rhetoric or political one upmanship.
While a state monetisation programme looks attractive enough, given the electoral compulsions one doesn't know whether such a move would find favour or not.
BBMP largesse
There is also a feeling that the CM could loosen his purse strings to offer a bag of booties targeting Bengaluru where elections for the local body are due to be held later this year. Bengaluru is headline material and it is unmissable, said one analyst.
However, with a fund crunch, the question is how much the present government is willing to offer to grab control of the biggest city corporation in the state.

Reported by (AIMA MEDIA) from Bangalore Karnataka