The Hindu : Somashekar demands `White Paper' on State's finances

Online edition of India's National Newspaper
Monday, Oct 13, 2003

Southern States

Southern States - Karnataka

Somashekar demands `White Paper' on State's finances

By Our Special Correspondent

Bangalore Oct. 12. The Floor Leader of the All-India Progressive Janata Dal (AIPJD) in the Legislative Assembly, B. Somashekar, has demanded that the Government issue a "White Paper'' on its finances.

He told presspersons here today that the Government was facing bankruptcy. It had not kept the promise to issue a White Paper on the finances every year. The Government gave the details of the financial situation of the State only in the first year of its term, and it was unable to do so now because of the difficult situation and its inability to settle bills, he added.

Mr. Somashekar said the situation was worsening, and the World Bank had stopped extending loans to the State. However, the Government was claiming that it had stopped seeking loans from the bank. The bank had directed the Government to initiate financial restructuring since the loan component in relation to the Gross State Domestic Product (GSDP) was at 38 per cent against the ceiling of 33 per cent. The Government stated in the medium-term fiscal plan tabled in the Legislature recently that the figure was not above 33 per cent, he added.

He said the borrowings not reflected in the Budget had resulted in financial chaos, and government-owned boards and corporations were being persuaded to go in for loans, which would have to be cleared by the Government. Because of this, the Budget had not given a clear indication of the finances of the State.

Although the revenue deficit was more than Rs. 4,000 crore, the Government had stated in the Budget that it was about Rs. 2,000 crore. The deficit was largely due to the failure to mobilise tax revenue. The revenue realisation in Tamil Nadu and Andhra Pradesh was much higher than that in Karnataka, Mr. Somashekar said.

Total borrowings

The AIPJD leader said the total borrowings of the Government had been estimated at over Rs. 45,000 crore. "The Government is suppressing facts by window-dressing its accounts,'' he alleged. The total borrowings were at Rs. 12,000 crore when the term of the previous Government ended in 1999. Despite heavy borrowings, the people had not reaped benefits in terms of infrastructure development, he added.

Mr. Somashekar said the Finance Department had been rejecting proposals pertaining to re-appropriation of budgeted funds by various departments. The departments could earlier divert funds allocated to a project.

The orders issued to stop this practice indicated the financial health of the State. Following the directions of the Finance Department, departments such as Social Welfare, Education, and Health were forced to stop welfare programmes, according to him.

Referring to online lotteries, he said the Chief Minister, S.M. Krishna, should convene an all-party meeting and impose a ban on them. According to reports, lotteries were earning Rs. 5,000 crore. However, the revenue to the Government was only about Rs. 100 crore, he added.

`A Congress programme'

Mr. Somashekar said the "Janaspandana" launched by the Chief Minister to interact with the people was a programme of the Congress and not that of the Government. It had been organised in view of the coming elections and not for redressing the grievances of the people. It was, therefore, no surprise that the people were expressing their anger at the Government during the programme, he added.

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