CM DK Shivakumar faces budget cuts warning as Karnataka’s liabilities hit 24.94% of GSDP, nearing the 25% FRBM limit
BENGALURU: In a straight warning to chief minister DK Shivakumar and his cabinet, the state finance department has asked for “prudence” in expenditure and to be prepared for budgetary cuts across departments.
Reason: The state government is facing a financial crisis with liabilities of the state at 24.94% of the gross state domestic produce (GSDP). In fact, preliminary assessment of the FD is that the state government will require an additional Rs 4,000 to Rs 5,000 for clearing the irrigation pumpsets (IP) subsidies, over and above the budget allocations.
In its leaked note, the FD has said that one of the biggest concerns for the state is the current drought situation in the state which in itself is a big financial concern. The FD said that the exact amount of monetary requirement for the drought will only be assessed after the government of India responds to a memorandum from the state government which is to be submitted shortly. This will delay or stop other works,” said the note. There is nothing wrong in their advice,” he said. Responding to the BJP allegations that the FD note was proof of the government going bankrupt, Shivakumar said let those criticising it ensure that the centre gives Karnataka its share of the promised money.
“In the current scenario, even a part of the funds needed for the proposals to be met will lead to cutting down from the allocations marked to other departments. “Being a finance minister I know which programmes to cut down and which to continue with. We need to survive with these five guarantees amid the inflation.