K'taka to phase out off-budget borrowings from 2008-09

By Staff
|
Google Oneindia News

Bangalore, July 26 (UNI) Karnataka will phase out off-Budget borrowings from 2008-09, according to the Medium Term Fiscal Plan 2007-11 submitted to the State Assembly today.

Total off budget debt stock of the state had reduced from Rs 7,295 crore in 2004-05 to Rs 4,731 crore in 2007-08, the report submitted by Deputy Chief Minister B S Yediyurappa, who also holds the finance portfolio, said.

Such borrowings would be mentioned in the Budget, the report said adding the state had been making constant efforts to bring down such borrowings as well as debt stock.

The medium-term fiscal plan also indicated the state government would create a central data base for all government guarantees extended by it and rate them to assess the associated risk through a professional rating agency.

The government was working on prescribing a protocol to be followed with regard to extension of government guarantees and filter incomplete or perfunctionary proposals. It was facing problem to monitor contingent liability of its guarantees as they currently reside with the adminsitrative departments executing them.

The necessity to form a centralised database for these guarantees emerged as it was found appropriate to classify them in terms of their proness to risk and review them selectively and take corrective action if required.

The medium-term plan said wide ranging reforms initiated in 2000 for taking corrective action for each of the components of fiscal framework have not only helped in recovery but also have imparted robustness to the finances of the state.

These measures included increasing revenues by disconitunation of tax based exemptions, rationalisation of tax structures in stamp duty, checking excise duty evasion by canalisation and curtailing expenditure by debt swapping and compression of wasteful expenditure.

It is proposed to continue the existing path of increased allocation for hgih priority development expenditure in areas of health, education, agriculture, irrigation and infrastructure.

The state is committed to maintaining sustainable debt stock and threfore its fiscal deficit target of three per cent as mandated in its Fiscal Responsibility Act.

To meet the expenditure requirements, surplus in revenue account is to be used for capital formation. It is proposed to increase the tax revenues through better tax administration and increasing tax base.

UNI

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