Karnataka CM defends State's borrowings for necessity

Bengaluru: Karnataka Chief Minister B.S. Yediyurappa on Wednesday defended his government's decision to borrow, saying the move arose out of necessity and not out of fancy wishes. Lashing out at the opposition who had alleged that the decision had pushed the State into the huge debt trap, Yediyurappa, in his reply on the budget discussion in the Assembly, said that the government has no magic wand or the treasury was not a 'Akshaya Patra' (inexhaustible Vessel) in the midst of an unprecedented global pandemic.

"We are witnessing another round of Covid with a spike in cases in Karnataka. If this is not controlled, then there is all probability that the State may face similar problems of mopping up revenue resources. The government needs everyone's support," he said, cautioning about Covid might derail plans again. He also stated that Karnataka was not the first State to borrow as all States have borrowed to bridge the fiscal and revenue deficits during the last fiscal. As Yediyurappa was reading out his reply, the opposition Congress continued with protests against the government, citing inaction against former minister Ramesh Jarakiholi in the "Sleaze CD" case.

The CM also declared that he was not anti-backward classes as he has allocated Rs 2,316 crore for backward class development, while Rs 1,000 crore was collectively allocated for the Vokkaliga and Lingayat communities.

Noting the lockdown due to pandemic, and floods and drought had adverse ramifications on finances, he said that the government had no other choice but to borrow money in order to take up and complete various development works across the State. "The government is ready to take remedial measures to overcome the situation (of fiscal deficit)," said Yediyurappa, who presented his eighth budget on March 8.

He claimed that he had presented seven revenue surplus budgets before but the same could not be achieved this year due to pandemic. Assuring that he would take necessary measures for the State to bounce back economically, he said: "Various committees have already been set up to merge departments. This will help us improve finances by cutting down on expenses and enhancing non-tax revenue."