Karnataka first State enacted FRBM Act

The 15th Finance Commission headed by Chairman, N.K. Singh along with its Members and senior officials met today with the H. D. Kumaraswamy, Chief Minister, Karnataka alongwith his Cabinet colleagues and senior State Government officials. The Commission appreciated that Karnataka is first State in the country to have enacted FRBM Act.

According to the Commission, the Karnataka’s contribution to GDP of the country was 7.9% in 2018-19.  In 2018-19, the share of primary, secondary & tertiary sector in GSVA (current prices) of the State was 11%, 21% & 68%, respectively.

In 2018-19, per capita NSDP of the State was Rs. 2,07,062 against per capita income of Rs. 1,26,406 for India. State’s share in inter-se devolution was 4.713 based on the recommendations of FC-XIV which is less than its share of 5.05% in total population of the country.

On the State’s Fiscal parameters, the Commission noted that in 2014, State Government amended Karnataka Fiscal Responsibility Act, 2002 to provide for, inter-alia, inclusion of Off Budget Borrowings that are to be repaid from the State Government’s budget in “Total Liabilities” to provide true picture of sustainability of debt.

The State has been maintaining revenue surplus since 2004-05. Karnataka has witnessed third highest own tax revenue (OTR) to GSDP ratio of 7.2% in 2016-17 (after Chhattisgarh & Telangana) amongst all 29 States as compared to OTR-GSDP ratio of 6.3% for all States.

In 2016-17, the State had incurred lowest committed expenditure (salary, pensions & interest payments) at 25.1% of total revenue expenditure as compared to that of 41.7% for all States. The State had fourth lowest debt to GSDP ratio of 18.3% in 2016-17 (after Chhattisgarh, Assam, and Maharashtra) amongst all 29 states.

Regarding the Health Outcomes of Karnataka, the Commission observed that the performance of State on most of the health indicators is better than all India’s average.

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