After discussing the enormous numbers in the Union Budget 2023, I am here to take you through Karnataka State Budget 2023. Karnataka State is five times the size of Kerala or 263 times the size of Singapore! It is a large State; it must be grossing up a lot of revenue for the Government. But the fact is that the State’s revenue is not commensurate with the size!
The projected revenue of the State is more or less equal to the annual income of Tata Consultancy Services or just 30% of the revenue of Reliance Industries Limited. The gross revenue of the State for FY 2023-24 is Rs.2,25,000 Crore. It’s good to know the sources.
Stamp Duty –Documents such as sale deeds (change of ownership of the immovable property), Gift deeds, Wills, Partition deeds, Partnership deeds, etc., must be registered by paying the applicable stamp duty to the State Government. In Karnataka, around 7 Lakh documents are registered every year. The Government is expected to get Rs.19,000 Crore as stamp duty and Registration fees.
Vehicle Registration Tax – Another significant revenue accrues to the State is from the transport department. Primarily, the vehicle registration tax (popularly called Road tax) is projected at Rs.10,500 Crore. For example, a car with an ex-showroom price of Rs.20,00,000 will incur a Road Tax of 3,60,000 (18%). For your information, around 11000 vehicles are sold, of which 5000 new vehicles are added to Bangalore Road every month!
Excise Duty – The Government has an ambitious target of Rs.35000 Crore (up from 29000 crore in the previous year) from Excise Duty on the sale of liquor. They feel more and more people will consume alcohol in FY 23-24; Covid fear has receded, and party time has increased!
Electricity Taxes – expected around Rs.3050 Crores. None of us has any problem paying this, as long as we have uninterrupted power!
Mines and Geology – Rs.7,500 Crores from mining & auctioning of mining blocks; and other miscellaneous receipts like rent, interest, land revenue, etc., adds up to Rs.5000 Crores.
Commercial Taxes – GST on the sale of goods and services is the primary revenue earner for the state government. It is budgeted to get Rs.92,000 Crores. Further, The Central Government shares a portion of taxes they collect with the States; Karnataka’s share is expected to be around Rs.37000 Crores and grants of Rs.11,000 Crores.
Does this mean the State Government is spending over Rs.2,25,000 crores on various projects and Schemes in a year? No. This much revenue is not sufficient to meet the projected expenses. So, the Government will borrow around 35% of its revenue, I mean Rs.78,000 crores, as Loan to meet the costs. What are those expenses? We shall discuss this in the following short note.
Very nice information for us…thank you