State's debt grows to size of budget

The accumulated debt of Karnataka is almost equal to the size of the annual budget. Chief Minister D V Sadananda Gowda said the state’s accumulated debt is estimated to be Rs 1,02,561 crore on March 31, up from Rs 95,192 crore a year ago. Responding to Appaji alias Channabasavaraj Shankarrao Nadagouda (Congress) during question hour in the Legislative Assembly, Gowda, however, stressed that the state’s borrowings are “within permissible limits”.

Last week, he presented the 2012-13 state budget facilitating a total expenditure of Rs 1,02,742 crore, an increase of 20.42 per cent over the budget of Rs 85,319 crore in the previous fiscal, exceeding the budget size of Rs 1 lakh crore for the first time.

In 2011-12 till January this year, the government has borrowed loans to the tune of Rs 5,154.72 crore, Gowda, who also holds the Finance portfolio, said. According to the Economic Survey of Karnataka 2011-12, advanced estimates of the state’s Gross State Domestic Product (GSDP) at constant (2004-05) prices show that the state’s economy is expected to grow at 6.4 per cent and reach Rs 2,97,964 crore in 2011-12 (from Rs 2,79,932 crore in 2010-11). Karnataka’s economy is showing encouraging trends due to a strong services sector, which grew by 10.6 per cent in 2011-12. However, there has been a slowdown in the agriculture and allied sectors (minus 2.9 per cent in 2011-12) attributable to a decline in crop area due to drought and floods, it said. “The growth rate of the industry sector is estimated to have decreased to 3.6 per cent during 2011-12, largely due to adverse impacts of the overall economic slowdown. The significant growth rate of the service sector from 9.1 per cent in 2010-11 to 10.6 per cent in 2011-12 is a key driver of the growth in the current year’s GSDP,” the survey said.