Karnataka budget it’s populist and responsible

Karnataka budget it’s populist and responsible

Chief minister Siddaramaiah’s last full budget before next year’s assembly election comes garnished with freebies and leavened by savvy politics but is remarkably responsible, given this is the last chance he has to woo voters. The budget comes with a revenue surplus and a fiscal deficit of 2.65% of the state gross domestic product. This is welcome.
Apart of the state’s borrowing is from the Centre, and has to be excluded while calculating the combined fiscal deficit of the Centre and the states, meaning that Karnataka’s contribution to the combined deficit would be smaller. State budgets together account for 56% of general government expenditure, and unless the states maintain fiscal discipline, macroeconomic stability would be at risk, even if the Centre sticks to the path of rectitude. The chief minister has two substantive ideas, apart from announcing new hospitals, airports and universities. Development of Tumkur as another business hub, to take heat off from overcrowded Bengaluru.
The other is reintroduction of a local, mildly intoxicating drink, Neera, which had served as the basis of considerable business wealth in the state, besides of government revenue, before being banned, leaving the field open for beer, rum, whisky, etc. Its reintroduction would please powerful rural constituencies, besides giving the state a fresh stream of revenue. The scrapping of VAT on liquor will not make liquor cheap, in general, as it is accompanied by additional duties of excise.
Populist replication of Tamil Nadu’s cheap canteens costs little money but would prove popular. Capping multiplex ticket costs is unsound in principle; it would have been better to let greater competition and more sensible real estate policies to do the job. Free laptops are now par for the course.