Karnataka's financial condition good, stable, says CM

Karnataka Chief Minister B S Yediyurappa on Saturday said the State's financial condition was "good", and expressed confidence that the government would meet tax collection targets despite limitations.Yediyurappa, who also holds the finance portfolio, was responding to criticism about his purported statement that the states treasury was "empty".During the discussion on demands, when the Leader of opposition Siddaramaiah raised the issue, Yediyurappa clarified that his statement was wrongly interpreted and said the state's financial condition was "good and stable.""In todays financial condition when the state was affected by floods and we have to focus on large-scale relief work, few MLAs brought up concerns on some developmental work.I had told them that we may not be able to do things now as we have to focus on affected areas, so wait till the new budget.I had not said that treasury was empty," he said.Seeking approval for the budget and supplementary estimates, Yediyurappa said he was seeking approval for the budget that was presented by the previous coalition government headed by H D Kumaraswamy.He said "due to floods, we have placed supplementary estimate..despite limitations this time, we are confident that the we will meet the tax collection target.The Karnataka legislature on Saturday passed the 2019-20 budget with an outlay of Rs 2.40 lakh crore.The Karnataka Appropriation Bill was passed in both Houses of the legislature, allowing the government to draw from the consolidated fund for the remainder of the 2019-20 financial year.The previous Congress-JD(S) coalition had earlier taken a vote on account to spend Rs 80,168 crore for the first four months (April 1 to July 31). Later after Yediyurappa assumed charge, his government in July had obtained vote on account for incurring expenditure of Rs 62,751 crore for the next three months (August to October).The Supplementary Estimates (second instalment) of Rs 7927.23 crore was also passed by the legislature.Earlier, participating in the discussion, Leader of the Opposition Siddaramaiah expressed reservation about approvals being sought without proper discussion on demands, and said it was against rules and procedures of the House.He said Karnataka was one among the few states in the country that has good track record on maintaining fiscal responsibility and expressed doubts about state meeting its Gross State Domestic Product (GSDP) targets this time."The GSDP has been estimated at Rs 16.98 lakh crore.If the targets are not met, will fiscal deficit remain below 3 per cent (of GSDP as per norms)?" he questioned, as he also expected that loan borrowings may also go up.Pointing out that there was economic recession in the country, Siddaramaiah, who has presented 13 budgets for Karnataka, said the economic situation would also reflect on the state."Motor Vehicle Tax- we are lagging, because the sector itself has fallen," he said.Karnataka may see a shortfall of Rs 1,672 crore under the devolution of funds from the Centre, he claimed, and advised Yediyurappa to speak to central ministers and see that it doesn't happen as the state was already in trouble because of floods.The Union Finance Minister's announcement of reduction in Corporate Income Tax for the year 2019-20 may have an adverse impact on devolution from the Centre, as the divisible pool of taxes may come down, according to the mid-year review of state's finances tabled in the assembly.The three-day session, primarily called for the passage of budget, so that payments are not affected after October 31, discussed the flood relief in the affected regions for the last two days.The legislative assembly and council were adjourned sine die on Saturday.

Karnataka's financial condition good, stable, says CM

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