Karnataka budget: Enough to clinch 2018?

Bengaluru: It’s already being dubbed "populist" and  a "please-all budget" that is an unvarnished attempt to consolidate Chief Minister Siddaramaiah's core AHINDA vote bank besides aggressively wooing the weaker sections of other categories of  society which make up the Congress' vote bank of OBCs, Dalits and minorities.

In reality, the CM who holds the finance portfolio, on Wednesday presented the state budget - his 12th - that had several major announcements without a caste-tag - such as the creation of 49 new taluks, the subsidised canteens in 198 wards in Bengaluru and Saviruchi mobile canteen in rural areas, free water to slum dwellers, free LPG connection to five lakh families who are not qualified under central scheme, extension of Ksheera Bhagya scheme for the entire week, Pay commission to review the salaries of government employees, rise in food grains from 5 kgs to 7 kgs to be given under PDS, establishment of Raichur university and free Laptops to over 1.5 lakh students who enroll for professional courses.

The nod to AHINDA in the health care sector came with the allocation of  ambulance services  to habitats with over 40% SC and ST population. He sought a vote on account for Rs 1,86,361 crore.

In putting a hold on the much awaited waiver of farm loans, some said till before the next election, the CM was roundly criticised. The opposition said the CM's explanation that he did not consider waiving farm loans as farmers who availed loan from state government was only 25%, while the remaining 75% availed loan from commercial banks and that giving this sop would not benefit all, did not hold water.

The deciding factor may have been that the majority of farmers with bad loans are middle class voters who are perceived to be non-Congress voters. Since Karnataka is also one of the states which is due to migrate to the new GST regime, the chief minister did not tweak the existing tax structure for automobiles, barring two wheelers that cost upward of Rs 1 lakh. Sales tax on two wheelers will go up from the present 10% to 12%.

By his own admission, the state recorded a sluggish growth in Gross State Domestic Product at 6.9% as against the 7.3% last fiscal of 2015-16. All the three sectors - agriculture, industry and service sector-registered a marked decline in growth rate, painting a grim economic condition of the state.

Added to this was the fall in tax collection which was attributed to demonetisation. As a result, the net tax collection fell short by over Rs 1,000 crore from the budget estimate made last year.

Karnataka however netted over Rs 3,000 crore from its share in central taxes and grants from central government, the only area where it made an impressive performance was in the non-tax revenue sector where it collected over Rs 8,000.

Considering this sluggish growth in the last fiscal, Mr Siddaramaiah who is hailed as deft administrator seemed to have worked to a political arithmetic, giving AHINDA funds a boost, rather than consolidating the economic position of the state.

Mr Siddaramaiah had a different view. He defended his budget saying he did not deviate from the standard budgetary practices. The fiscal deficit of 2.69% of the GSDP is less than the permitted level of 3% of GSDP, the CM said. Total liability of over Rs 2 lakh crore is just 18.93% of the GSDP which is again way below the highest level of 25% of GSDP.