CM Yediyurappa presents revenue deficit budget as Karnataka’s GSDP contracts by 2.6%

March 8, 2021

Chief Minister BS Yediyurappa presented the budget for Karnataka for the fiscal year 2021-2022 on Monday. With a total outlay of Rs 2,46,207 crores, the budget is only slightly more than the previous year’s budget size.
In a first for Karnataka in decades, Yediyurappa presented a revenue deficit budget with the estimated revenue deficit pegged at Rs 15,133.60 crores for 2021-2022.
As earlier reported by The New Indian Express, revised estimates for fiscal year 2020-2021 showed that the pandemic-hit year also ended in a revenue deficit of Rs 19,485.84 crores. Despite increased borrowings and revenue receipts expected to be lower than 2020-2021, Yediyurappa chose not to increase excise and fuel cess.
Karnataka’s GSDP contracted by 2.6% in 2020-2021. While agriculture saw 6.4% growth, industrial sector and service sector saw contraction by 5.1% and 3.1% respectively. Much like the previous year’s budget, Yediyurappa clubbed departments under umbrella sectors.
The highlight of the budget was a ‘women’s day special’ announcement of women empowerment schemes and plans at the cost of Rs 37,188 crores.
While a total of Rs 31,028 crores have been allocated to agriculture and allied sectors, Rs 62,150 crores have been set aside for welfare sector that involves health, education, backward classes development etc.

Rs 52,529 crores has been allocated for economic growth sector that includes industries, IT, infrastructure, mobility etc. Bengaluru development has received a dedicated allocation of Rs 7,795 crores while culture & heritage sector has been given Rs 2,645 crores. Administrative reforms sector has been allocated Rs 52,519 crores in the budget.
Some big ticket projects from the water resources ministry, subsidies and concessions for entrepreneurs and farmers and plans of new policies on cyber security and defence manufacturing have found prominent mention in the budget.
“In Karnataka, Rs 5,372 crores has been spent for the management of COVID-19 and 63.59 lakh beneficiaries of different sectors have been given help,” Yediyurappa said while recounting the challenges his government faced during the pandemic.