Wednesday, May 13, 2009

Karnataka's finances likely to be hit Mangalorean.Com

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The economic recessionary trend and slump in revenues from stamps and registration and motor vehicle taxes is all set to cast a shadow on resource mobilisation in Karnataka.

Chief Minister B S Yeddyurppa on Tuesday reviewed the progress of the Finance Department and said it is expected that the revenue resource mobilisation target of Rs 48,380 crore set for 2009-10 could come down by at least six per cent due to the effects of economic slowdown and reduced earnings from stamps and registration and motor vehicle taxes.

Mr Yeddyurappa, who is also holding finance portfolio, said the state mobilised resources to the extent of Rs 41,151 crore (07-08), it was Rs 43,292 crore in 2008-09.

He told reporters after reviewing the financial position at a meeting with Finance Department officials here that during 2008-09, the revenues from motor vehicle tax witnessed a two per cent decline at Rs 1,617 crore as against Rs 1,650 crore in 2007-08.

Similarly in stamps and registration sector, the realisation has come down by 15 per cent touching Rs 2,908 crore in 2008-09 compared to Rs 3,409 crore earned during the previous fiscal, Yeddyurappa said.

Despite the recessionary trends, he said the State government's financial position is better compared to other states and the plan and non-plan expenditure for the year 2009-10 has been estimated at Rs. 58,860 crore.

Karnataka ranked first in the tax collection in 2008-09 in the country and its tax resources constituted 11.5 per cent of the Gross State Domestic Product (GSDP) while Andhra Pradesh secured second position and its tax resources formed 10 per cent of the GSDP, the Chief Minister said.

The fiscal deficit has been restricted to Rs. 8,424 crore in 2008-09, which amounted to 3.35 per cent of the GSDP against the limit of 3.5 per cent fixed by the Central government. The government was expected to borrow Rs. 8,493 crore during 2009-10, he said.

The State's plan expenditure up by 23.5 per cent in 2008-09 compared to 2007-08 while non-plan expenditure increased by five per cent during the same period. The plan expenditure in 2008-09 was Rs. 19,960 crore against Rs. 16,263 crore 2007-08. The plan and non-plan expenditure in 2008-09 was Rs. 51, 918 crore.

"The recessionary trend, which is a global phenomenon, has affected the state's economy also. But the impact is not that serious." Mr. Yeddyurappa said the government has been successfully restricting the non-plan expenditure to some extent. The non-plan expenditure was restricted to Rs. 31,958 crore which was only 5 per cent more than the previous year (2007-08).

The Chief Minister has directed officials of the Finance resource mobilising departments to increase the enforcement and other regulatory measures to achieve more compliance and increase the state's tax revenue.

Assuring that all promises made in his annual budget, including farm loan at three per cent interest would be met, Mr Yeddyurappa said the government had released Rs 400 crore towards procurement of fertiliser and Rs 500 crore each for road development and purchase of power.

Replying to a question, he said despite good collection in revenue and capital expenditure, the global economic meltdown had caused adverse impact on industrial, agricultural production and affected the export of IT, Bio-technology and other industrial products.

''The new government which would assume office at the Centre after the general elections is likely to take remedial measures to overcome the recession,'' he added.

CM unhappy with execution of schemes

Chief Minister B. S. Yeddyurappa has expressed unhappiness over poor implementation of the National Rural Employment Guarantee Scheme (NREGS) and other rural development progrmmes of the state government in the last financial year (2008-09).

In his address to the meeting of Chief Executive Officers of 29 zilla panchayats in the State, Mr. Yeddyurappa, directed CEOs to prepare action plans to expedite implementation of all rural development schemes in the current fiscal year. Mr. Yeddyurappa reviewed the performance of NREGA, Rural Drinking Water Supply Scheme, Prime Ministers' Grameen Sadak Yojana and Suvarna Gramodaya Scheme on Tuesday evening at the Vikasa Soudha.

The State Government has not utilised the funds available under the NREGS in 2008-09 and several reasons have been cited for less utilisation of funds granted by the Centre.

The scheme aimed to enhance the livelihood security of the people in rural areas by guaranteeing 100 days of wage employment in a financial year to rural households.

He said under the PMGSY, the State ranked second in the implementation of the scheme and the Centre has granted additional Rs. 850 crore under the scheme. As many as 200 villages had been identified in the Gulbarga division under the Suvarna Gramodaya scheme at a Cabinet meeting held in Gulbarga last year. But the implementation of the scheme was slow, the Chief Minister said.

Minister for Rural Development and Panchayat Raj Shobha Karandlaje and other officials of the department were present at the meeting.

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