Karnataka's economic growth this year may get contracted due to flood havoc: Report
Bengaluru, Oct 11: Karnataka's economic growth for the current year may get "contracted" due to the havoc caused by floods, the mid year review of state's finances tabled in the legislative assembly on Friday said.
It also said the union Finance Minister's announcement of reduction in Corporate Income Tax for the year 2019-20 may have an adverse impact on the devolution from government of India, as the divisible pool of taxes may come down.
"The state's economic growth (GSDP) was 9.6 per cent during FY 18-19.
The havoc caused by the floods in the state in 2019-20 has affected the socio-economic conditions. This has had an adverse impact on the investment in infrastructure and other development activities because of which the growth may get contracted for the current year," the mid year review stated.
With the increase demand for flood relief and other contingent liabilities, the Karnataka Chief Secretary, who is also the head of the Fiscal Management Review Committee, has advised the Finance department to propose additional resource mobilization measures to ensure that all fiscal parameters will be maintained.
The Committee noted the increased pressure on the state government to take up relief activities in flood hit districts and consequent requirement of funds,the review said.
The committee also noted that around Rs Rs 5,000 crore was already made available through reallocation of budgetary grants and supplementary estimates for flood relief work.
It also said the Chief Secretary has advised the finance department to follow up with the union government through the disaster management cell of the Revenue department for early release of funds under NDRF.
A total of 2,798 villages in 103 taluks of 22 districts were affected by floods in which around seven lakh people were shifted to safer areas.
Ninety one people died and about 3,400 heads of cattle perished in the rains and floods.
The review noted that devolution from the government of India in the first six months of 2019-20 was Rs 14,668 crore at 36.8 per cent of budget estimate of Rs 39,806 crore
However the union government in its July 5 budget indicated that devolution to the state was Rs 38,134 crore, which was Rs 1,672 crore lower than the amount indicated in the budget February 2019.
"Subsequent to the budget presented by the Union government in July, the Finance Minister has announced reduction in Corporate Income Tax for the year 2019-20.
This may have an adverse impact on the devolution as the divisible pool of taxes may come down,"it further said, noting that devolution as a proportion of actuals of 18-19 was 41.7 per cent in the first half of last year.
The review also noted that Karnataka has been maintaining revenue surplus since 2004-05 and upto September 2019, the revenue surplus was Rs 12,376 crore, compared to the budget estimate of Rs 258 crore, "reflecting a comfortable mid year revenue position for the state."
"Revenue surplus would also be maintained at the end of FY 19-20," it added.
The review also pointed out that with prudent fiscal management, continuing revenue mobilization efforts, pruning down non-essential expenditure and identification of savings to partly finance new expenditure commitments included in the Supplementary Estimates, it should be possible to remain within the fiscal deficit limit proscribed.
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Karnataka power tussle: BJP leader calls Siddaramaiah 'Sultan for 15 days'
Bengaluru/Bagalkot (PTI): In the midst of the ongoing power tussle within the ruling Congress in Karnataka, senior BJP leader and MP Govind Karjol called CM Siddaramaiah "Pandrah din-ka-Sultan" (Sultan for 15 days), and said after that, he will not be the chief minister of the state.
Speculation has once again surfaced within the Congress party and political circles about a possible decision on leadership change and cabinet reshuffle after May 4, once the results for Assembly elections in four states and one union territory, along with bypolls to two Assembly constituencies in Karnataka, are announced.
"With the fight for the CM chair in the Congress, there seems to be no administration at Vidhana Soudha. The result for Siddaramaiah's CM chair fight will also be declared, along with election results for five states (four states and one union territory) and bypoll results for Bagalkot and Davanagere South Assembly seats in Karnataka," Karjol, a former Deputy CM, said.
Speaking to reporters here, he said, "As per today's information, Siddaramaiah is a Sardar for fifteen days, he is Pandrah din-ka-Sultan, after that Siddaramaiah will not be the chief minister of the state."
Stating that Shivakumar is ready to take up the top job, the MP said that this is the reason Siddaramaiah's supporters have gone to New Delhi to meet the Congress President.
"Already 40-odd legislators have lobbied in support of Siddaramaiah; about 50 are lobbying in support of Shivakumar. Amid this fight for the CM chair, the administration has completely collapsed," he said, urging the government to focus on addressing drinking water issues in various parts of the state amid summer by releasing at least Rs 50 crore per district.
PWD Minister Satish Jarkiholi on Monday met Congress President Mallikarjun Kharge and General Secretary (in charge of Karnataka) Randeep Surjewala in New Delhi and requested them to address the speculation regarding the change of leadership in Karnataka.
Subsequently, Social Welfare Minister H C Mahadevappa too met the party leadership in Delhi.
Both Jarkiholi and Mahadevappa are considered close to Siddaramaiah.
While MLAs and leaders who want Shivakumar to be elevated as CM have recently claimed they expect some "sweet news" by May 15, which is their leader's birthday.
Meanwhile, a team of 40 MLAs is preparing to visit New Delhi to press the Congress high command for a Cabinet reshuffle.
Speaking to reporters in Bengaluru, Leader of the Opposition in the Assembly R Ashoka hit out at the Congress leadership for indulging in "power tussle" instead of addressing the people's concerns. He called the government "anti-people" and "dead" to the people of the state.
With the fight for the CM chair, the ruling Congress in Karnataka seems to be shifting to Delhi. Congress MLAs are repeatedly touring Delhi, upset over the state leadership amid a power struggle between the CM and Deputy CM. This proves that there is no value for the state leadership," he said.
Pointing out that the Deputy CM Shivakumar was not present at the recent special cabinet meeting, which decided on internal reservation among SCs, the opposition leader said, "If the cabinet meeting was held purposely, despite knowing that Shivakumar was in Delhi, it proves that there are factions within the party"
"This government is dead in a way," he said, as he hit out at the Congress MLAs and Ministers, including Shivakumar, for doing "Delhi Yatras" instead of addressing drinking water issues in various parts of the state amid summer, picking up in the state.
