Census, Per Capita Income Reasons For Low Budget Allocation

Former chief secretary and ex-chairman of the Second Karnataka Administrative Reforms Commission TM Vijay Bhaskar spoke to TNIE editors and reporters on the State and Union budgets, importance of having an elected local body in Bengaluru, cadre management and the recommendation made by the commission he had headed.

- TEAM TNIE

Excerpts.

How are Central and State budgets changing over the years?

Budgets have changed after the introduction of GST; earlier there was scope to increase taxes, like sales tax. After GST, taxation matters are discussed in the GST Council. Now the state has control only on Excise, Stamps and Registration and Motor Vehicles taxes. At the state level, taxation has become less important. Budget is a policy document that lays a road map for the entire year. The chief minister is also the finance minister in Karnataka. Unless there is allocation for major schemes or projects in the budget, the government follows the same pattern with little changes. At the state level, there will be demand for new schemes to make the budget more interesting.

What is the process involved in budget preparation?

It starts with the Finance department, that estimates revenue generation for the year. The large amounts are for committed expenditure such as salaries, interests to be paid on loans, pensions, social security schemes, Central schemes and external aided projects. This leaves a small amount of uncommitted expenditure which is left to the discretion of the finance minister, who can announce new schemes or projects. The finance minister holds meetings with officials and ministers. Each department presents its expenditure for the year and also new schemes it wants to take up during the coming year. The CM and Finance department officials decide which ones are to be taken up; this is a political decision. Once this is finalized, the budget speech and budget estimation is also prepared.

What about Central budget allocation for the state?