Karnataka debt zoomed 255% in fiscal 2018-19: CAG
Karnataka is facing a financial crunch, evident from a record 255 per cent increase in its net debt for fiscal 2018-19, an official said on Wednesday while citing a Comptroller and Auditor General (CAG) report
Bengaluru: Karnataka is facing a financial crunch, evident from a record 255 per cent increase in its net debt for fiscal 2018-19, an official said on Wednesday while citing a Comptroller and Auditor General (CAG) report.
"In its state finance audit report, the CAG red-flagged that Karnataka's net debt was Rs 17,766 crore in 2018-19 financial year, a whopping increase of 255 per cent over the 2017-18 fiscal," said the report, which was tabled in the state legislature on Tuesday.
A 6-day Monsoon Session of the legislature began on Monday after it was delayed due to the Covid-induced lockdown and surging virus cases across the southern state.
To meet the growing expenditure, the previous Janata Dal-Secular (JD-S)-Congress coalition government borrowed heavily -- 55 per cent of the debt from the open market, 27 per cent from public account, 6 per cent from national social security fund and 5 per cent from the central government.
A fractured verdict in the May 2018 Assembly elections forced the outgoing Congress to ally with the JD-S to form the coalition government, with HD Kumaraswamy appointed the Chief Minister on May 23, 2018.
The resignation by 17 rebel legislators, including 14 from the Congress and 3 from the JD-S in July 2019, however, led to the fall of the 14-month-old coalition government on July 26, 2019 after Kumaraswamy lost the trust vote in the Assembly for want of a simple majority.
Holding the finance portfolio, Kumaraswamy presented two Budgets in July 2018 for fiscal 2018-19 and February 2019 for fiscal 2019-20.
The CAG found that an expenditure of Rs 2,901 crore was wrongly classified by oversight, while the supplementary provision of Rs 1,319 crore was unwarranted.
"The total provision for the fiscal under review was Rs 2.45 lakh crore and expenditure Rs 2.2 lakh crore, while Rs 25,139 crore remained unspent," said the report.
Reappropriation of funds in 27 cases was not judicious, resulting in excess provision.
Noting that the Supplementary Budget was also not properly assessed to be fiscally neutral, the report said it failed to curtail expenditure.
The report advised the BJP government to ensure adjustment of abstract contingent bills in the stipulated time.
"The tax revenue growth rate decreased to 11.13 per cent in 2018-19 from 12.1 per cent in 2014-15," the report added.