Karnataka chief minister Jagadish Shettar on Friday presented a revenue surplus budget for the fiscal 2013-14, with a reduction in the Value Added Tax (VAT) rates on several products consumed by the common man. The government had raised VAT rates by 50 basis points across various slabs last year to generate additional revenues to fund waiver of crop loan taken by farmers in view of the severe drought.
At the same time, Shettar, who also holds the finance portfolio, has proposed to revise the 17 slabs of declared prices relating to Indian Made Liquor by increasing each of them by Rs 40. He has projected a revenue surplus of Rs 585 crore, which is 38 per cent lower than the revised estimates for the current fiscal (2012-13). Revenue surplus is maintained since 2008-09.
The state's fiscal deficit is expected to be Rs 16,714 crore, which is 2.78 per cent of gross state domestic product (GSDP). Total liabilities at Rs 1,34,472 crore at the end of 2013-14 are estimated to be 22.35 per cent of GSDP, which is within the ceiling of 25.2 per cent limit of the Karnataka Fiscal Responsibility Act for the year 2013-14.
"All these three fiscal parameters are within the mandate of the Karnataka Fiscal Responsibility Act and reflects the fiscal discipline of the State," Shettar said in his first budget speech.
The chief minister, who presented the last budget of the first BJP government in Karnataka, said, "This is the last year of the unprecedented people's mandate given to our party. We have worked tirelessly to fulfill the faith reposed on us by the people. The financial position of the state is sound and robust. During the last five years, this government has improved TaxoGSDP ratio to about 10 per cent and has continuously brought in reforms considered to be an excellent model in the country."
Continuing in the path of his predecessors, D V Sadananda Gowda and B S Yeddyurappa, the chief minister also presented agriculture budget separately. The overall size of the Budget for 2013-14 has increased by 13.88 per cent to touch Rs 1,17,005 crore compared to the current fiscal (2012-13). The State's Plan size has been proposed 10.5 per cent higher at Rs 46,450 crore compared to Rs 42,030 crore for 2012-13. The total receipts are estimated to be Rs 1,15,983 crore during 2013-14 with revenue receipts of Rs 94,216 crore and capital receipts including borrowing of Rs 21,767 crore.
The total expenditure is estimated to be Rs 1,17,005 crore consisting of revenue expenditure of Rs 93,631 crore and capital expenditure of Rs 23,374 crore. The debt repayment is Rs 5,840 crore.
The total agriculture budget size is fixed at Rs 22,310 crore, which is 13.47 per cent higher than 2012-13.
The state's total tax revenue for 2013-14 is estimated to be Rs 61,012 crore, with an increase of 18 per cent over the Budget Estimate for 2012-13. Shettar has proposed to collect Rs 3,838 by way of non-tax revenues.
The government expects to receive Rs 14,375 crore by way of the share in the Central Tax and another Rs 14,991 crore as grants from government of India. These revenue receipts are estimated to be supplemented by gross borrowings of Rs 21,532 crore, non-debt receipts of Rs 100 crore and recovery of loans to the extent of Rs 135 crore.
With elections due in May this year, the chief minister has exempted tax on paddy, rice, wheat, pulses and products of rice and wheat for one year.
Tax on arecanut dehusking machine, domestic containers, doors, window frames, window shutters, refractory monolithic powder and cocoa husk would be reduced from 14.5 per cent to 5.5 per cent.