The Chief Minister (CM), Sri Siddaramaiah, presented the state’s budget on 7th July. This was his 14th budget presentation, the highest by any Finance Minister of Karnataka. The budget assumes much significance being the first by the new government after assuming power on 10th May, possibly aided by the now ubiquitous guarantee schemes.

Before we cover the budget proposals, a quick look at how Karnataka is performing on various key metrics. It is estimated that the GSDP would be ~US$ 270 Billion in FY 22-23, and would grow to ~US$ 320 Billion in FY 23-24 at a nominal growth rate of ~17% (real growth rate of ~9-10%). Karnataka is the 5th largest state in terms of GDP, closely behind Gujarat. The per capita NSDP is close to Rs. 275,000, again amongst the highest in the country.

Karnataka ranks lower on HDI metrics (11th), comparable more to Nagaland or Arunachal Pradesh. Its low ranking could be attributed to poor infrastructure, health & education facilities and high gender inequality. In fact, Karnataka ranks 17th in the Gender Inequality Index amongst 22 major Indian states. There is much to be done for the progress of our people.

Moving to this year’s budget; the CM began his speech with an ode to the saintly reformer Basavanna and the saintly Maharaja Nalvadi Krishnaraja Wadiyar, and commitment to development that’s centered around social justice. The speech was replete with verses of Rashtrakavi & Padma Vibhushan Kuvempu, the greats D. V. Gundappa, D R Bendre & Girish Karnad, mighty role models and visions that one must live up to. What we must assess over the next year is whether the good intentions of the legislators translate into true development.

Here are the key highlights from this year’s budget:

Infrastructure:

1. 1,700 kilometres of State highway to be developed in the State Core Network. This was also proposed by the erstwhile government.
2. 5,000 kilometres of roads shall be constructed to connect the major district centre and villages
3. Airstrips are proposed to be developed in Dharmastala, Kodagu and Chikkamagaluru with the intention of promoting tourism,
4. The coastal region will witness much activity as the government proposes to launch 12 minor port development projects, deep water all-weather greenfield ports, and the operation of an additional shipyard in Mangalore.
5. A 2 MW capacity Solar Plant will be setup in Solar park.
6. Byndoor, where BCL India, has an office, will witness marine development and the establishment of a Seafood Park

Economic Development:

1. A ‘Plug and Play Industrial Park’ will be developed around Bengaluru to encourage early commencement of the operations of Multinational Companies.
2. A ‘Start-up park’ is proposed near Kempegowda International Airport.
3. Mega Textile Parks shall be established in Raichur, Kalaburagi, Vijayapura and Chikkamagaluru.
4. An Ethanol production facility shall be established in Mandya
5. The limit for the loan provided at a 4% rate of interest for women entrepreneurs in the service sector increased from 2 crore to Rs.5 crore

Education & Health:

1. A new university shall be established in Chikkamagaluru. Libraries shall be established in 330 gram panchayats.
2. A science section shall be started in 100 Degree colleges under the “CNR Rao Science Programme”.
3. The first Environment Science University shall be setup in Sirsi, where BCL India has an office too.
4. The government targets to impart skill development training to 5 lakh candidates and also provide industrial and entrepreneurship Training
5. Health Camps will be organised twice for comprehensive health check-ups in rural Mental Health Schemes, Cancer Detection Camps, and Tuberculosis initial detection camps are also proposed.
6. Community Health Centres in 7 taluks will be upgraded to 100 bedded Taluk hospitals.
7. 129 Taluk laboratories, District laboratories in all districts and a State level referral laboratory in Bengaluru are being proposed for providing laboratory services locally.
8. AIIMS model hospital shall be setup in Raichur, and a Super Speciality hospital in Kumta
9. Inida’s first dedicated Public Hospital for Organ Transplantation shall be setup in NIMHANS.

Agriculture & allied sectors:

1. The government plans to increase the limit for interest free short term loan to farmers from 3 lakh to Rs.5 lakh. Millet production is being encouraged.
2. A Horticulture College will be established in Tiptur and
3. Mega Dairy with a processing capacity of 2 lakh litres of milk will be established in Ballari
4. An online portal to adopt street dogs shall be launched.
5. Artificial Reefs shall be setup in coastal districts. Further, a subsidy of Rs. 50,000 shallbe offered to fishermen to upgrade their kerosene based engines to disel/petrol based engines to disel/petrol based ones.
6. The revolving fund for purchase of food grains under MSP has been increased to 3,500 Crore. Amendments to the APMC Act have been rolled back.
7. Funds have been allocated for the development of Upper Krishna and Upper Bhadra projects.

Social Welfare:

1. Core projects in Kalyana Karnataka, (comprising of Bidar, Yadgir, Raichur, Koppal, Kalaburagi, Bellari and Vijayanagar) at an investment of 5,000 Crore shall be undertaken
2. Housing facility for 10,000 fishermen, allocation of 10,000 sites to economically weaker sections, and development of 30,000 properties under the Housing Board are proposed
3. Monthly honorarium to Anganawadi workers and assistants, Asha workers, cooks and assistants, Grama Sahayakas, Home Guards and Librarians, has been increased by Rs. 1,000.
4. Funds have been allocated for to provide tap connections to rural households
5. Funds have been allocated for the construction of homes for Pourakarmikas
6. Delivery persons for e-commerce, auto, taxi and lorry drivers shall benefit from the CM Bima Yojana providing coverage of 4 Lakhs per annum

Focus: Bangalore

1. A 40-kilometre line is being commissioned under the Bangalore Metro Rail
2. Funds have been allocated to decongest 75 junctions, construction of elevated roads and flyovers, and the white-topping of arterial & sub-arterial roads
3. Funds have also been allocated for the development of the Bengaluru Sub-urban Rail project.
4. A project to control the flooding of Bangalore shall be undertaken with the assistance of the World Bank
5. Ultramodern odourless waste treatment plants are proposed to be established in every ward.
6. 2,000 posts to be created at various levels to strengthen police system in Bengaluru city

The planned expenditure (revenue & capital) for FY 2023-24 is ~ Rs. 3 Lakh Crore (or 3 Trillion rupees, used henceforth). The government expects to spend ~Rs. 52,000 Crore annually to meet its poll commitments.

The expected revenue for the coming year is ~ Rs. 2.4 Trillion. The government has proposed to increase the guidance value on which stamp duty would be calculated and has also increased excise duty on Indian Made Foreign Liquor. Levy of profession tax has been relaxed; employees earning up to Rs. 25,000/month would not be required to pay any profession tax, up from the erstwhile limit of Rs. 15,000/month.

The fiscal deficit of the state would be ~ Rs. 0.7 Trillion or ~2.6% of the state’s GSDP.

The coming year would not only test the government’s abilities to implement the proposed schemes effectively, but would also be a litmus test of its commitment to the poor. With national elections around the corner, the Karnataka government might focus all its energies for the development of the state, with its citizens hopefully being the biggest beneficiaries.

Ending this blog with a beautiful verse by D V Gundappa

ಮಡಕೆಯನು ಬಡಿದು ಹೊನ್ ಕೊಡವ ತೋರುವ ಸಖನೆ ।
ಪಡೆದಿಹೆಯ ರಹದಾರಿಯನು ಹೊನ್ನ ಗಣಿಗೆ? ॥
ಒಡಲಿಗೊಗ್ಗಿದ ನೀರ ಚೆಲ್ಲಿದೊಡದೇಂ ಪಾಲ ।
ಕುಡಿವ ಸಂತಸಕೆಣೆಯೆ? – ಮಂಕುತಿಮ್ಮ

Friend, you cannot break the mud pot with the promise to show a golden one. Have you got the license to mine gold so that you can show these dreams to people? If people are comfortable drinking water (which suits well to their body) then you should not ask them throw water away and get used to milk. Will they be happy doing so? – Mankutimma