Karnataka Chief Minister Bommai began his maiden budget presentation at 12.30 p.m. at Vidhana Soudha in Bengaluru on March 4. He chaired a Cabinet meeting prior to the presentation where the State Budget 2022-23 was approved.

This is Mr. Bommai’s maiden budget presentation and comes ahead of the Karnataka Assembly elections next year.

No new tax

Chief Minister Basavaraj Bommai has not imposed any new tax in his maiden budget. “The economy in 2021-22 is on the road to recovery. In these circumstances, I am not willing to put an extra burden of additional taxes on the common man,” he said in the budget. Reminding that the government had cut down sales tax on petrol and diesel by ₹7 per litre in November 2021, he said he does not intend to increase sales tax on petrol and diesel. 

Revenue collections increase

Revenue collection that started in a sluggish manner due to the second wave of the COVID-19 pandemic at the start of the year, picked up later in the year, the Chief Minister said. Due to this phenomenon, the share of central taxes has been increased in the revised estimates of the Union Budget to R₹27,145 crore from R₹24,273 crore. The Union Budget for 2022-23 has estimated R₹29,783 crore as tax devolution to Karnataka.

GST

“The GST collections has increased in 2021-22 compared to the previous year, showing we are on the road to recovery,” Mr. Bommai said. The Union Government has given ₹18,109 crore as GST loan in lieu of GST Compensation in addition to R₹7,158 crore GST compensation, which has “helped us not only to effectively manage COVID-19 and its related expenses but also ensure that all developmental works and programmes were funded adequately, providing impetus to growth”.

As scheduled, GST compensation will end by June 2022, but Mr. Bommai has appealed to continue it for at least three more years.

Budget size increased

The buoyancy in Karnataka’s economy has helped the State Government to cut down on budgeted borrowings in 2021-22. Borrowings have been revised from ₹67,100 crore to ₹63,100 crore. This even as Karnataka has increased the overall size of the 2021-22 budget — from ₹2,43,734 crore to ₹2,57,042 crore — in revised estimates. When compared to 2020-21, the budget size has increased by 7.7%.

Budget expands, fiscal deficit 3.26%

With a size of ₹2,65,720 Crore, Budget 2022-23 is 3.3% larger than the revised estimates of the 2021-22 budget.

The budget has kept the fiscal deficit at 3.26%. “Though the Union Government in its budget has allowed States to borrow up to 3.5% of GSDP, our government has restricted the borrowing to 3.26%. By this, we have demonstrated our commitment to fiscal discipline and forethought,” Mr. Bommai said.

Borrowings

The State Government, which cut down on its estimated borrowings in 2021-22, plans to borrow a total of ₹72,000 crore in 2022-23. “With this, the total liabilities of Karnataka at the end of 2022-23 are estimated to be ₹5,18,366 crore, which is 27.49% of the GSDP. Suitable amendment will be introduced to the Karnataka Fiscal Responsibility Act (KFRA), 2002 in this regard,” the Chief Minister said.

KFRA restricts total liabilities of Karnataka to 25% of the GSDP. It was pegged at 20.42% of GSDP at the end of 2020-21, but ballooned to 26.9% at the end of 2021-22, and is now estimated to be 27.49% at the end of 2022-23. Karnataka’s borrowings shot up largely during the Covid-19 pandemic when the State’s economy ‘slowed down’ and many sectors even contracted.

‘Budget of Hope’

Describing the 2022-23 budget as ‘one of hope’ post-pandemic, Mr. Bommai said there is now better augmentation of resources. The economy has revived, with service sector growing by 9.2%, industrial sector by 7.4% and agriculture sector by 2.2%. GSDP is expected to grow by 9.5% compared to the previous year.

‘Pancha Sutra’ for welfare

Backward areas of Karnataka will be identified in a scientific manner to improve the Human Development Index of all districts under ‘Pancha Sutra’ (five-point formula).

‘Namma Clinics’

The government proposed to establish ‘Namma Clinics’ in major cities and all wards of Bengaluru. These clinics will provide diagnosis and treatment for non-communicable diseases and refer patients to higher facilities for specialist treatment, if required.

More Jayadeva centres

A 350-bed branch of Jayadeva in Hubballi and a trauma centre in Tumakuru have been proposed. 500 children with congenital hearing loss will get cochlear implants under government funds this year.

Focus on hospitals

A Kidwai Regional Cancer Centre will be set up in Belagavi at a cost of ₹50 crore. A sum of ₹89 crore has been allocated to modernise K R Hospital in Mysuru, and ₹1,000 crore for the Rajiv Gandhi University of Health Sciences (RGUHS) campus in Ramanagaram.

The State Government proposes to set up 300 women health centres that will also act as welfare centres. Seven taluk hospitals will be upgraded to 100-bed facilities.

₹1,000 crore to improve PHCs

Monthly honorarium to Accredited Social Health Activists (ASHA) to be increased by ₹1,000. A total of ₹1,000 crore has been allocated to improve 100 Primary Healthcare Centres (PHCs).

Creches in taluk headquarters

The State Government will start creches in two taluk headquarters per district in areas with a high concentration of working women. The honorarium for anganwadi workers has also been increased by ₹1,500 for those who have served for 20 years, and ₹1,250 for those who have served between 10-20 years. 

₹500 crore for primary schools

The government has set aside ₹500 crore for basic amenities in primary schools.

Model universities

New model universities will come up in Chamarajanagar, Bidar, Haveri, Koppal, Hassan, Kodagu and Bagalkot. They will be distinct from conventional universities with the emphasis on harnessing technology.

Fortified rice to tackle malnutrition

Under a new scheme, ‘Poushtika Karnataka’, fortified rice with added nutrients will be distributed at a cost of ₹93 crore in 14 districts to tackle malnutrition.

Widows’ Wage scheme

The government proposed to increase subsidy for women under the Widows’ Wage scheme. Monthly pension for sexual minorities has been increased to ₹800 while pension for women who are victims of acid attacks been increased from ₹3,000 to ₹10,000.  

ORR-airport line will be completed by March 2025

On ongoing metro projects in Bengaluru, the Chief Minister stated that 33 km of under-construction metro lines will be operationalised by the next financial year.

The Chief Minister said that the 58-km ORR-airport metro line from Central Silk Board to Kempegowda International Airport (KIA) will be completed by March 2025.

Two lines under Phase III of Namma Metro

The detailed project report (DPR) for Phase III of Namma Metro project will be submitted to the Central Government. Two new lines have been proposed under Phase III: one from J P Nagar to Hebbal, covering a distance of 13 km, and the other from Hosahalli to Kadabagere. The total cost of the project is estimated to be ₹11,250 crore.

Sarjapur to Hebbal metro line

Bengaluru will get a new metro line from Sarjapur to Hebbal. A detailed project report (DPR) will be prepared for construction of the 37-km metro line via Agara, Koramangala and Dairy Circle. The estimated cost of the project is ₹15,000 crore.

No fresh allocation for suburban rail project

Civil works for the suburban rail project from Baiyappanahalli to Chikkabanavara will commence soon. Rail Infrastructure Development Company (Karnataka) Limited (KRIDE), which is the implementing agency, has already floated tenders for this corridor. No fresh budgetary allocation has been made for this project.