Marching ahead

The BJP government has firmly consolidated its position in the two years that it has been in office.

THE B.S. Yeddyurappa-led Bharatiya Janata Party (BJP) government in Karnataka completed two years in office on June 23. In this time it has consolidated its numerical strength in the 224-member State Assembly, ridden out a farmers' protest against the shortage of chemical fertilizers, held firm in the face of a vicious internal battle for power, thwarted communal skirmishes and even overcome an unwarranted attempt at moral policing by some of the fringe elements of the Sangh Parivar. The BJP also won for the first time the prestigious Bangalore city corporation.

Yeddyurappa, 67, said his government was marching ahead in several fields and was confident that Karnataka would fast emerge as the model State. Besides improving infrastructure, the emphasis is on enhanced power generation and rapid industrialisation so as to boost growth and provide ample employment opportunities for the youth. On the power sector front an area that has haunted Karnataka for decades and stunted its growth Yeddyurappa, who holds the energy portfolio, initiated steps to bring down transmission and distribution losses from a record 36 per cent in the past to 18 per cent now. The government has made several ambitious plans and already approved projects that will add 16,000 megawatts (MW) of generation capacity.

Financial sector

Karnataka is known for its prudent fiscal management, a fact that the Planning Commission, the Reserve Bank of India and the 13th Finance Commission have acknowledged in their annual reviews. Even during the global economic recession and the financial meltdown, which seriously hurt the industrial and services sectors, Karnataka managed to hold its own. According to the Chief Minister, since last year, the State has recorded a significant revival of its economy. We expect the revival of economic growth in the State and the country to get consolidated during the current year, he said while presenting the State's budget proposals for 2010-11.

The rate of growth of Karnataka's economy, which was 4.5 per cent at constant prices and 12.8 per cent at current prices during 2008-09, is estimated to be 5.5 per cent at constant prices and 10.3 per cent at current prices during 2009-10, said Yeddyurappa, who also holds the Finance portfolio. He added that the State needed to grow faster even though the present rate of growth could be termed satisfactory in view of the overall climate of the economic slowdown.

In terms of select indicators, Karnataka's financial position is on a sound footing compared with other States. The State's tax revenue is more than 10 per cent of the gross State domestic product (GSDP), the highest in the country. As per Reserve Bank of India figures, the average of all other States was below 6 per cent. Between 2004-05 and 2007-08, Karnataka maintained its fiscal deficit within the limit of 3 per cent of the GSDP every year as prescribed in the Fiscal Responsibility Act. The limit was raised to 3.5 per cent on the advice of the Central government during 2008-09 and to 4 per cent during 2009-10 in view of the global financial crisis. The State has maintained its fiscal deficit well within this limit. For 2009-10, the fiscal deficit is expected to be 3.77 per cent of the GSDP, that is, Rs.11,266 crore; in 2008-09, it was 3.23 per cent, that is, Rs.8,732 crore.

The State has been able to maintain a revenue surplus since 2004-05 by restricting revenue expenditure within the limits of revenue receipts every year. According to officials in the State's Finance Department, another pointer to the robustness of Karnataka's financial discipline is its consolidated debt, which is expected to be Rs.82,513 crore by the end of 2009-10. While interest payment on the loans taken by the State was Rs.4,532 crore in 2008-09, or roughly 10.46 per cent of the GSDP also considerably lower than the national average of 16.9 per cent revenue receipts jumped from Rs.43,291crore in 2008-09 to Rs.48,913 crore in 2009-10, an increase of Rs.5,662 crore.

The State has mobilised Rs.18,135 crore of commercial taxes, Rs.6,998 crore of excise revenue (an increase of over 20 per cent), and Rs.2,069 crore through motor vehicle taxes. The total estimates of expenditure are expected to be Rs.62,414 crore during 2009-10. Karnataka's Plan expenditure jumped from Rs.19,889 crore in 2008-09 to a record Rs.24,649 crore during 2009-10, an increase of Rs.4,760 crore, or roughly 24 per cent.

Bhagyalakshmi scheme

The government has introduced schemes to benefit farmers, weavers, fisherfolk, widows, destitute senior citizens, the physically challenged, schoolchildren and the girl child. Our policies and administration are aimed at being pro-people and farmer-friendly said Yeddyurappa. One of the success stories has been the Bhagyalakshmi scheme, which aims to secure the future of girl children in families whose annual income is less than Rs.12,000 in rural areas or less than Rs.17,000 in urban areas. Under the scheme, a deposit of Rs.10,000 is made in the name of the girl child soon after her birth, and it is payable as a gift of Rs.1 lakh in the form of bonds when she turns 18. Two girls in each family are eligible for enrolment in the scheme, and the beneficiaries will have to be sent to school. The girls will be eligible for free medical treatment. The government will spend Rs.380 crore on the scheme during 2010-11.

A salient feature of the scheme is that the government will meet the educational expenses of the girl if she decides to continue her studies after the 10th Standard. The parents are eligible to pledge the Bhagyalakshmi bonds in banks and avail themselves of loans up to Rs.50,000. Of the 9,49,167 beneficiaries identified, deposits to the tune of Rs.831 crore have been made in the name of 7,20,562 girls, and another Rs.297 crore in the form of bonds will be deposited this year.

Boosting infrastructure

In a bid to address complaints of lack of quality infrastructure in the State, the government has given infrastructure development top priority. Bangalore, the capital, has received the maximum outlay in the State budget for infrastructure development, with emphasis being placed on the completion of the Bangalore Metro Rail Project. The government hopes to run the first metro train by December. Included among the several infrastructure projects being taken up in Bangalore are the laying of new roads, widening of existing roads, improvements and construction of flyovers and underbridges at a cost of over Rs.800 crore, completion of the second phase of the Cauvery fourth stage drinking water project at a cost of Rs.3,383 crore and development of five new housing layouts. Apart from Bangalore, the government is also concentrating on developing infrastructure in all urban areas, tier-2 and tier-3 towns, and district and taluk headquarters.

The government has also initiated steps to establish a Global Financial District on 200 acres (81 hectares) near Bangalore International Airport Ltd (BIAL) at Devanahalli. Of this, 150 acres (60 ha) has been earmarked for corporate offices of nationalised banks, insurance companies, financial institutions, stockbroking houses, chit funds and to set up facilities for training, research and development. The project will be implemented by the Industrial Finance Corporation of India (IFCI) at a cost of Rs.1,000 crore. On the remaining 50 acres (20 ha), there will be a plush residential complex, educational institutions, shopping malls, multiplexes, health facilities, clubs and restaurants. According to Minister for Large and Medium Industries Murugesh R. Nirani the aim was to ensure that the Global Financial District was completely self-sufficient. The Minister, who spearheaded the recently concluded Global Investors Meet in Bangalore, added that the Global Financial District could be compared with the much larger Bandra-Kurla complex in Mumbai.

Tourism

The government also plans to treat tourism as a priority sector. Over Rs.20,000 crore of investments have been lined up on the basis of the recently prepared master plan for the sector's development. Yeddyurappa said: Our tourism potential is yet to be explored fully and exploited. Karnataka is now the fourth in the country in attracting tourists. We have a wide variety of tourist destinations.

Tourism and Infrastructure Minister Gali Janardhana Reddy has been working in tandem with Yeddyurappa to promote and develop the State. To boost tourism, Karnataka has planned airports on the public-private-partnership (PPP) model in Shimoga, Gulbarga, Bijapur, Belgaum, Hassan and Bellary and the upgrading of Hubli airport to international standards. Besides, Davangere, Chikmagalur, Udupi, Madikeri (Kushalnagar), Gokarna (Uttara Kannada), Chitradurga, Bagalkot, Haveri, Gadag and Kollegal will have airstrips. The goal is to provide air connectivity within 100 km from anywhere in the State, Said Yeddyurappa. Janardhana Reddy has initiated plans to promote heli-tourism by providing helicopter services to all the heritage sites in the State. According to him, several entrepreneurs have evinced an interest in the project.

Other areas

As many as 112 PPP projects, involving a total outlay of Rs.98,837 crore, are being taken up. The State government is also participating in a large number of railway projects at the cost of Rs.137 crore, including the construction of overbridges and underbridges at level crossings.

In a bid to boost dairy farming in rural areas, the government is offering a special incentive of Rs.2 for every litre of milk procured. The special incentive payment is made to the woman member of a family. This has increased the purchasing power of rural women and also enhanced daily milk production and procurement by five lakh litres. Thus, over Rs.276 crore has been pumped into rural areas. The Karnataka Milk Federation gives an incentive of Rs.2.50 for every litre of milk procured; 6.41 lakh avail themselves of this incentive. Thus, rural women get an incentive of Rs.4.50 a litre of milk. Women cooperative milk producers have received incentives to the tune of Rs.399 crore under the scheme.

To encourage high school education in rural areas, the government gives free bicycles to students of government and aided schools. Last year, about 12 lakh schoolchildren benefited from this scheme. To take the government machinery to the doorstep of the people and to redress their grievances, the government evolved the Janaspandana programme, under which officers from all departments visit hobli (village) centres on all Saturdays, except second Saturdays, to enable the people to meet them and submit their petitions directly. Grievances are attended to on the spot. As many as 8.96 lakh petitions have been received, of which 8.73 lakh, or 98 per cent, have been disposed of.