In the wake of reduced revenue to the State owing to COVID-19, the Opposition Congress on Friday suggested to the government to reduce development works and wasteful expenditure in the current financial year.
The Congress opposed borrowings of ₹33,000 crore for committed and developmental expenditures of the State. The borrowings of the State would reach ₹85,000 crore, including budgetary provision of ₹52,000 crore, in 2020–21, Congress members pointed out.
Speaking on the Karnataka Fiscal Responsibility (Amendment) Bill, 2020, in the Legislative Assembly, Leader of the Opposition Siddaramaiah said the government should take steps to scrap unnecessary posts in different departments, and should not allow secretaries to use vehicles of both their departments and boards/corporations.
The Congress leader said that in boards/corporations where no chairman had been appointed, secretaries, who were heading both departments and boards/corporations, have been using vehicles for ferrying their family members. The government should mercilessly take action against such officials and issue guidelines for stopping the use of vehicles of both department and board/corporations by secretaries.
The former Chief Minister also asked the government to withdraw orderlies posted to senior police officers and reduce expenditure.
The Karnataka Fiscal Responsibility (Amendment) Bill, 2020, was passed in the Assembly on Friday to raise the fiscal deficit from 3% to 5% of the estimated Gross State Domestic Product (GSDP) in the current financial year.
Law and Parliamentary Affairs Minister J.C. Madhuswamy informed the House that the State was expected to face revenue shortfall of ₹65,000 crore this year owing to reduced economic activity in view of COVID-19.
The amendment to the Bill would enable the government to borrow ₹33,000 crore to meet both committed and development expenditures during 2020–21.
Congress members staged a walkout from the House opposing the Bill. Mr. Siddaramaiah said the Bill would increase the borrowings of the government and the State would slip into a debt trap. He said the State’s committed expenditure increased from 77% in 2017–18 to 90% in 2020–21.
Krishna Byre Gowda said increased borrowing would have a cascading effect on the State economy and the States’ committed expenditure would touch ₹1.05 lakh crore in this fiscal year. The borrowings should be the actual size of the GSDP, which would be around ₹14 lakh crore this year, and not the GSDP of the previous year — ₹18 lakh crore, he said.
