The Mid-Year Review of State Finances shows Karnataka’s gross state domestic product (GSDP) registered a growth of 10.2%.
Karnataka stood third in the country for foreign investments attracted in the first half of the 2024-25 fiscal year, while securing the second position in Goods and Services Tax (GST) collection. Foreign investments amounted to $3.5 billion, according to the government’s Mid-Year Review of State Finances.
The report said that gross state domestic product (GSDP) registered a growth of 10.2 per cent in nominal terms in the previous fiscal year. “The growth trajectory of the state economy is likely to continue at a steady pace with a positive outlook in the agriculture sector, which has significantly picked up due to a good Southwest monsoon,” the report said.
Revenue receipts for the state in the first half of the 2024-25 fiscal year were described as “exceptional”, growing by 13.8 per cent compared to the same period last fiscal year. “The state continues to hold the second position in total GST contributions to the country. A growth of 11 per cent has been achieved in total GST revenue generated from the state in the first half of 2024-25 compared to 2023-24,” the report said.
GST revenue collected in the first half of the current fiscal year reached Rs 37,298 crore, compared to Rs 33,818 crore in the corresponding period in the last fiscal year. Similarly, the state’s own tax revenue also saw a significant increase. For instance, commercial taxes collected until September 2024 totalled Rs 49,264 crore, approximately 10 per cent more than the Rs 44,831 crore collected from April to September 2023.
The revenue generated from the stamps and registration department saw a notable increase owing to revisions in guidance value and stamp duty. For the first half of the 2024-25 fiscal year, the department collected Rs 11,920 crore in revenue, around 28 per cent more than the Rs 9,344 crore collected during the same period in the last financial year.
Revenue deficit
“Increase in committed expenditure mainly on account of pay revision to state government employees and state’s commitment to welfare schemes have increased the revenue expenditure of the state, resulting in revenue deficit for 2024-25. However, the state has taken up several measures to reduce the revenue deficit by mobilising revenue receipts like long-pending revision of rates of state’s own taxes and rationalising non-tax revenues by revising fees & user charges for the services provided by the government to the public,” the report said.
The Budget Estimate (BE) of the revenue deficit in the 2024-25 fiscal year is Rs 27,354 crore.
The report said the total liabilities “in absolute numbers” are expected to increase from Rs 5,81,228 crore in the Revised Estimate of 2023-24 to Rs 6,65,095 crore in the BE of 2024-25. The total liabilities, meanwhile, accounted for 23.24 per cent of the GSDP and remained within the norms stipulated under the Karnataka Fiscal Responsibility Act, it noted.
source/content: indianexpress.com (headline edited)