Daijiworld Media Network - Bengaluru (SP)

Bengaluru, Feb 16: Most of the people are expecting a populist budget from chief minister (CM), Siddaramaiah, as they expect from him sops including waiver of farm loans without limit and big projects for cities to please farmers and urban dwellers alike. The preparation of state budget that is being presented in the state assembly by the CM who also has the finance portfolio with him today, is an arduous task in view of the need to articulately balance income and expenditure, particularly so on account of slower economic growth and spiralling expenditure.

Siddaramaiah, who has a vast experience of having worked as finance minister for a long tenure in the past, knows well that he cannot overlook the need to keep in check the fiscal deficit. How he will achieve this, is a million dollar question only his budget will reveal. At the same time, he is compelled to appease all the sectors including Dalits, backward classes, minorities, government employees, people living in urban and rural centres etc because of the forthcoming election.

As the chief minister is expected to announce scheme of providing free laptops and bus passes to students and extend further subsidies to some other sectors, the size of the budget as well as the deficit are expected to be more than the last year. He is also likely to announce about acceptance of sixth pay commission recommendations, which will benefit government employees and pensioners, but put heavy burden on the exchequer.

In view of forthcoming election, the CM cannot take the risk of earning the wrath of the people by announcing new taxes. Mobilization of resources will be one of the most daunting tasks he will face. As the state is not expected to reach revenue targets projected by it in the last budget under commercial taxes, state excise, stamps and registration and motor vehicle taxes, it has to be seen how he will accomplish this task. The sops declared during the previous year like waiver of farm loans and other subsidy schemes will add to the burden on the budget this year, total outlay of which is expected to cross two lac crore rupees this fiscal.

In the recent past, the Fiscal Management Review Committee headed by the chief secretary that had gone into the fiscal and debt position of the state, had sounding a warning to the government about steep increase in expenditure, and advised the government to cut down non-essential expenses and augment non-tax revenue by revising the rates. At the same time, if the CM does not stop announcing new subsidy schemes, he might be harming sectors like education, health and rural development, which will be starved of budgetary support, in the coming year.