<p>When Karnataka goes to polls around this time next year, the state’s outstanding liabilities will touch a massive Rs 5.91 lakh crore, according to the Medium Term Fiscal Plan (MTFP), which has cautioned the state government on the implications of high debt levels. </p>.<p>The debt burden will be Rs 6.60 lakh crore in 2024-25 and Rs 7.38 lakh crore in 2025-26, says the MTFP tabled in the Assembly. </p>.<p>This has prompted the Fiscal Management Review Committee, the government’s top bookkeeper, to ask Chief Minister Basavaraj Bommai to come out with a roadmap so that Karnataka becomes a revenue surplus state and total outstanding liabilities can be reduced. </p>.<p>Total liabilities for the current fiscal are Rs 4.58 lakh crore. Bommai has estimated liabilities to be Rs 5.18 lakh crore in 2022-23. </p>.<p>“High debt levels show the increased borrowings availed by the state to meet the expenditure commitments,” the MTFP says. “With the committed expenditure consuming a major share in the state’s revenue expenditure, the rising debt levels will eventually result in a large share of revenue expenditure being spent on interest servicing,” it says. </p>.<p>Bommai has said in his budget that he plans to borrow Rs 72,000 crore in the new fiscal.</p>.<p>In a healthy trend, the government's revenue receipts of Rs 1.89 lakh crore exceeded committed expenditure that came up to Rs 1.69 lakh crore. The challenge is to keep earning more than what the government has to spend on. </p>.<p>This year, Karnataka has paid Rs 38,430 crore in salaries. The outgo next year will be Rs 41,288 crore, and by 2025 expenditure on salaries will be Rs 66,251 crore. The increase is attributed to the possibility of Karnataka adopting the 7th Pay Commission recommendations. </p>.<p>The end of GST compensation this year is another worry. “The revenue shortfall and increased expenditure commitments has pushed the state into a revenue deficit. With the end of GST compensation from 2022-23 the reduced revenue collection may result in reduction of capital expenditure in future years,” the MTFP says. </p>.<p>The government will have to look for newer avenues to generate income. </p>.<p>According to the MTFP, capital receipts may be increased “in the near future” by monetising government assets. Bommai has announced in the budget that the disinvestment process will start in two state-run public enterprises. </p>.<p>"Since it is difficult to meet the expenditure commitments without a big leap in revenue growth in the near future, the Committee recommended to look into the expenditure rationalisation..." the MTFP says.</p>.<p><strong>Check out the latest videos from <i data-stringify-type="italic">DH</i>:</strong></p>
<p>When Karnataka goes to polls around this time next year, the state’s outstanding liabilities will touch a massive Rs 5.91 lakh crore, according to the Medium Term Fiscal Plan (MTFP), which has cautioned the state government on the implications of high debt levels. </p>.<p>The debt burden will be Rs 6.60 lakh crore in 2024-25 and Rs 7.38 lakh crore in 2025-26, says the MTFP tabled in the Assembly. </p>.<p>This has prompted the Fiscal Management Review Committee, the government’s top bookkeeper, to ask Chief Minister Basavaraj Bommai to come out with a roadmap so that Karnataka becomes a revenue surplus state and total outstanding liabilities can be reduced. </p>.<p>Total liabilities for the current fiscal are Rs 4.58 lakh crore. Bommai has estimated liabilities to be Rs 5.18 lakh crore in 2022-23. </p>.<p>“High debt levels show the increased borrowings availed by the state to meet the expenditure commitments,” the MTFP says. “With the committed expenditure consuming a major share in the state’s revenue expenditure, the rising debt levels will eventually result in a large share of revenue expenditure being spent on interest servicing,” it says. </p>.<p>Bommai has said in his budget that he plans to borrow Rs 72,000 crore in the new fiscal.</p>.<p>In a healthy trend, the government's revenue receipts of Rs 1.89 lakh crore exceeded committed expenditure that came up to Rs 1.69 lakh crore. The challenge is to keep earning more than what the government has to spend on. </p>.<p>This year, Karnataka has paid Rs 38,430 crore in salaries. The outgo next year will be Rs 41,288 crore, and by 2025 expenditure on salaries will be Rs 66,251 crore. The increase is attributed to the possibility of Karnataka adopting the 7th Pay Commission recommendations. </p>.<p>The end of GST compensation this year is another worry. “The revenue shortfall and increased expenditure commitments has pushed the state into a revenue deficit. With the end of GST compensation from 2022-23 the reduced revenue collection may result in reduction of capital expenditure in future years,” the MTFP says. </p>.<p>The government will have to look for newer avenues to generate income. </p>.<p>According to the MTFP, capital receipts may be increased “in the near future” by monetising government assets. Bommai has announced in the budget that the disinvestment process will start in two state-run public enterprises. </p>.<p>"Since it is difficult to meet the expenditure commitments without a big leap in revenue growth in the near future, the Committee recommended to look into the expenditure rationalisation..." the MTFP says.</p>.<p><strong>Check out the latest videos from <i data-stringify-type="italic">DH</i>:</strong></p>
