Karnataka CM Bommai asks Centre to extend GST compensation period

After presenting the Rs 2,65,720-crore budget of the State for 2022-23, he told reporters that it was revenue surplus but due to Covid-19 it has become revenue-deficit

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Karnataka | GST compensation | Basavaraj Somappa Bommai

Chief Minister of Karnataka Basavaraj Bommai on Friday said the estimated revenue deficit of Rs 14,699 crore in 2022-23 can be minimised if the Centre agrees to the request of the State to extend the GST (goods and services tax) compensation for the next three years in view of losses incurred due to the impact of COVID-19.

After presenting the Rs 2,65,720-crore budget of the State for 2022-23, he told reporters that it was revenue surplus but due to COVID-19 it has become revenue-deficit. In view of the increased expenditure commitments with the available resources, a revenue deficit of Rs 14,699 crore is estimated in 2022-23 compared to Rs 15,134 crore in 2021-22, said the Chief Minister.

He said the government did not take the GST component into account this year.

Bommai said the State used to get a GST compensation of Rs 11,000 crore to 14,000 crore, which would stop from this year. The State would get a compensation of Rs 4,000 crore to Rs 5,000 crore till June but due to the constitutional amendment, payment of compensation, which was only for five years since 2017, would be stopped, he said. “We have appealed to the Centre to continue it further for at least three years keeping into account the COVID-19 year. The Centre has time till June. If Centre agrees, we can minimise our revenue deficit,” said the Chief Minister.

According to Bommai, the union government had permitted borrowing up to four per cent of GSDP for 2021-22. The State had budgeted a borrowing of Rs.67,100 crore in 2021-22. However, the revenue increased and was expected to reach the budgetary targets.”So, we have reduced the borrowing to Rs.63,100 crore for 2021-22 in the revised estimates,” he said.

“We have budgeted total borrowings of Rs.72,000 crore for 2022-23,” he said.

Bommai was confident of the State achieving the targeted excise revenue, GST revenue, non-tax revenue and stamp duty revenue for the current fiscal. However, meeting the estimated revenue from motor vehicles would not be possible as the vehicle production has come down, he added. Speaking about infrastructure, he said the State would build infrastructure for waterways. “Besides ports, railways, airports and roads, we are for the first time focusing on waterways,” he said.

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

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