Karnataka Budget - 2021-22, Yediyurappa walks the tight rope

Karnataka Chief Minister BS Yediyurappa is likely to present the next year budget on 5th March as he holds finance portfolio. He  has begun consultations with  all stake holders and officials to prepare  a people friendly budget during this pandemic of corona.Pre budget meetings  with different ministries would  endup in a weeks time.All the  departments  are asking for enhanced budget. Peoples expectations  are  also high. Its becoming extremely difficult  for  BSY to meet both ends.He is walking on a tight  rope. Its like a double edged sword. On one  side taxing the people cuts the  popularity of the government  and on the other side  resource mobilization for developmental works has become herculean task.

Daily increasing  prices of  petroleum products is  a matter  of concern. This is  bothering the  Chief Minister. He is in dilemma of whether to  increase tax on petrol and diesel. Though he wishes to reduce  the  burden where is the  way to ramp up the dwindling revenue.? Petrol has crossed 90 rupees and moving very fast  to touch 100. Diesel over  Rs 80. It's  time to reduce KST instead further increasing it. The central government has  levied exorbitant cess, state government  also  cannot  do it in the interest  of common man. Added to it there  are few by-elections to assembly  and parliament are due. BJP wants to win over them. But the increasing costs of essential  commodities put tremendous  pressure  on how to  meet the  demand. Edible  oil prices have sky rocketed. In this situation  it's difficult to make a balancing  act. Therefore  there is no way left to BSY but to levy essential  taxes  to run the government. 

GST regime  has limited  options for state government to  levy taxes. In this category falls petrol, diesel  and  liquor. They can fetch more resources. But as per estimate revenue  collection may be Rs 1.25 lakh crore against estimated  expenditure of Rs 2.4 lakh crore. There  is a huge gap between collection and spending. Moreover, there  is no guarantee of resource mobilization reaching target. This  is a  peculiar situation that Chief Minister  is encountering.  

Likewise, there are different theories in circulation  about taxing liquor. Few says that  there will  be no increase of tax  on liquor. To increase  consumption you have to reduce  the rates. Last year also  the target  in excise duty collection  has not been achieved. So BSY has to do a balancing act. The  government has  already increased  excise duty twice  last year to the tune of 17%. But few says if there  is no rise in alcohol tax by 5 to10% then revenue collection may go down. Let us wish and hope that  BSY to present a good  budget.