Karnataka Chief Minister B.S. Yediyurappa on Monday allocated Rs 7,795 crore to Bengaluru as part of the 2021-22 Budget proposals for the comprehensive development of the city. The projects include developing new parks, fast-tracking the implementation of the suburban rail project, doubling between Yeshwantpur-Channasandra and Baiyappanahalli-Hosur divisions, construction of foot-over bridges and improvement of schools run by the Bengaluru civic body.
But the biggest question people have been asking about the Budget is if it is people-friendly. Yediyurappa's announcement that there won't be any further taxes, be it on petrol or diesel, was well received. "I am not willing to put the burden of additional taxes on the common people," he said.
In addition, Yediyurappa made various announcements, including and not limited to: gaushala in every district in the state, measures for women safety and empowerment, funds allocation to agriculture, education, skill development, healthcare, infrastructure and development.
"Tired chief minister's vague budget"
Reacting to the Budget 2021-22, various Congress ministers in the state pointed out certain shortcomings. Congress MLA Rizwan Arshad criticized the state government for borrowing more than it can repay. Arshad also warned that the common people will have to bear the cost of these decisions.
Speaking to International Business Times, Arshad further elaborated on the Budget deficits. He said that the main issue is that the state government is likely to borrow more than Rs 71,000 crore and its repayment is going to take a toll on the common people.
"Karnataka has been responsible towards its finances and planning of the Budget," he said recalling enacting the Karnataka Fiscal Responsibility Act 2002, which was intended to make the state government responsible for financial stability and sustainability and prevent the government to borrow beyond permissible limits required in the act. There were some amendments made to the act last year to allow higher market borrowings.
"Now the issue is they are going ahead and borrowing around Rs 71,000 crore and to service the interest and repay it is going to be a huge task. All the excise revenue is going to go into repaying the loans," Arshad cautioned.
He further added that the BSY-led government is "putting more burden on the people by borrowing more."
"I feel that this sets a wrong precedent for coming governments also. This will lead to a situation in the future, where Karnataka being a very vibrant and progressive state will buckle down on its treasure of borrowings and loans and it won't be different than any northern states," he told IBT.
Arshad also said that the borrowing trend is a vicious cycle, where the the government will continue to borrow more to repay the loans owed, which will result making Karnataka a state without a disciplined economy. He even pointed out that there are no indications as to where the investments will be made to create more revenue that will help repaying the debts.
"There is nothing in the budget which gives you hope. What is the message you sending across. You have borrowed the money and shown certain spendings. But there is no hopeful situation from the government. All of this is like a very tired CM came out with a vague budget," Arshad said.
"Ultimately the people will have to repay (through higher taxes)," he added.
"Pushing Karnataka to debt"
Another Congress MLA BZ Zameer Ahmed also criticized the Budget presented by the CM on Monday.
"Revenue deficit is expected to cross ₹15,000 Cr which is against the provisions of FRBM act. The committed expenditure is likely to exceed 100% of the revenue receipts which is dangerous. Yediyurappa is likely to borrow more than ₹ 71,000 Cr and total burden on the people of Karnataka will exceed ₹4,57,000 Cr. This BJP Karnataka govt is pushing Karnataka to debt and people to misery," Ahmed wrote on Twitter.
Ahmed also questioned the lack of developmental programs for the minorities in the Budget.
"Minorities are ignored in the budget. The allocation is negligible & there is no clarity on the developmental programs for the Minorities... this is a hollow budget & an attempt to fool people," he added.