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Pandemic to populist schemes: K’taka in fiscal soup

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Karnataka, which has vibrant automobile, agro, IT, aerospace, textile, biotech and heavy engineering industries, is showing a worrying trend due to impact of pandemic and natural calamities.

Despite being the cradle of startups and known as Silicon Valley of India, Karnataka took a huge hit on the financial resources from 2020-21 till date. The state’s public debt rose to 31.38 per cent between 2019-20 and 2020-21, creating a precarious financial situation.

The result of the pandemic has been such that, according to the 2020-21 finance and appropriation accounts report published by the Comptroller and Auditor General (CAG), the government recorded a drop of Rs 14,535 crore in tax collection.

The total debt of the state went up from Rs 3.19 lakh crore to Rs 3.97 lakh crore, an increase of Rs 78,000 crore, forcing the government to put some ambitious and populist programmes in abeyance.

Losses incurred in SGST, state excise duty, sales tax, stamps and registration and vehicle taxes. However, the non-tax revenue increased marginally from Rs 7,681 crore to Rs 7,894 crore.

According to Ministry of Statistics and Programme Implementation, the growth of GSDP has decreased by 9.28 per cent in 2019-20 and 2.23 per cent in 202-21 from 10.71 per cent in 2017-18 and 11.50 per cent in 2018-19.

The government had to deal with a severe drought situation when it assumed power in 2019, and then adding more woes, half of the state was affected by flood fury. Later, the Covid pandemic further complicated the financial situation of the state. During the tenure of Chief Minister B.S. Yediyurappa, no major populist programmes could be doled out. Presently, his successor Chief Minister Basavaraj Bommai has a tough job in hand as he is to present an election year budget on March 4.

The CAG report also shows that the government had to increase its borrowings. Effectively, the resultant impact has pushed the interest component to Rs 22,666 crore or 14.6 per cent of the state’s revenue receipts which is placed at Rs 1.56 lakh crore. The CAG has also noted that 13 projects of irrigation, 41 of roads, three of bridges and one in others category remained incomplete for over five years.

Ashwathnarayan, state BJP General Secretary, told IANS that as political parties are in the race to woo voters with social welfare schemes and freebies on the lines of Tamil Nadu and Andhra Pradesh, CM Bommai is inclined towards middle class and the upcoming budget is not going to be a fancy budget.

When asked whether the BJP is not under pressure after Delhi Chief Minister Arvind Kejriwal delivered free essential services to people, he said that Delhi is a mini state, it does not include farmers, mass transport system, irrigation projects, law and order system and even medical education. It is more like a municipal corporation area. Free electricity, free water and other populist programmes are not practically feasible in a large state like Karnataka.

Basavaraj Tonagatti, SEBI RIA, Fee-Only Financial Planner, CFP and Finance Blogger, told IANS that If you look at last year’s budget, you can notice that debt servicing increased to 21 per cent from 2019-20 to 2020-21. However, the capital expenditure increased just by around 5 per cent. This shows that the government is borrowing more but not diverting the same towards capital expenditure. It also shows that the government is not spending on creating assets, in particular physical infrastructure like roads, railway lines, factories, ports, etc. “Hence, I hope this year they manage their debt and divert the spending towards capital expenditure,” he said.

Though government is saying everything is fine, private investment has been going down for a long time, consumption is down, unemployment is high.

Abdul Azeez, Honorary visiting Professor of Institute for Social and Economic Change (ISAC), Bengaluru said that the pandemic has decelerated economic growth, increased unemployment and strengthened inflationary pressures, as a result of which the programmes of social justice have taken a hit.

The focus is to encourage consumption. If consumption increases, inflationary pressure will remain high. Already retail inflation has gone up to 6 per cent and wholesale by 11 per cent, he said. The government should think of providing necessary assistance to producers and they should be ensured of supply of electricity and water, he added.

Pavan Srinath, Independent Policy Researcher, said, “we need a growth oriented budget. We need to spend more. In the central budget also, capital expenditure has been increased. There is rural distress, high unemployment, the government should use its capacity to spend more.”

During the Congress regime, when Siddaramaiah was at the helm, he rained sops and freebies on people through bhagya schemes. The freebie blitzkrieg was so much that raised a debate whether these freebies are making people lazy.

Kannada writer S.L. Bhyrappa and Jnanpith recipient Chandrashekar Kambar came down heavily on Siddaramaiah government on Annabhagya scheme. Bhyrappa said, it is not possible to make poor people self-reliant through schemes like Anna Bhagya. The trend is very dangerous.

Chandrashekar Kambar maintained that freebies have made a deep impact on labour attitudes and the farming sector. When you take care of almost all the basic needs of the people — be it food, clothing, shelter, healthcare, children’s education, there is little motivation for work hard. Instead, the government should enable poor people to lead a dignified life, he said.

Rubbishing the criticism, Siddaramaiah said he will continue to implement schemes to bring poor people into the mainstream. Only hungry people will understand what is hunger. However, he suffered defeat in the following general elections.

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Cooperative taxi service to improve drivers’ income, ensure better services: Centre

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New Delhi, March 29: The objective of a taxi service based on cooperative model is to ensure democratic management by active participation of all members, and to ensure that maximum profit earned by such cooperative taxi society is distributed equitably among the taxi drivers who will be members of that society, the government has said.

India is home to over 8 lakh cooperative societies, serving nearly 30 crore members across 30 different sectors.

While replying to the discussion on Tribhuvan Sahkari University Bill, 2025 in the Lok Sabha, Union Home Minister and Minister of Cooperation, Amit Shah, said this week that in near future, a cooperative taxi service will be started, in which registration of two wheelers, taxis, rickshaws and four wheelers will be possible and the profit will go directly to the driver.

Based on principles of “Sahakar se Samriddhi”, a taxi-service cooperative will be formed by willing taxi drivers and the management will rest with the members of such society.

“Such an initiative will lead to overall prosperity and improving the income, working conditions, and standard of living for such taxi drivers/members of the cooperative society while providing better services to the consumers,” according to the ministry.

‘Sahkar’ or cooperation is a concept where a group of people voluntarily come together and form a cooperative society or Sahkari society based on mutual benefit and common economic interest.

Sahkari models of economic cooperation have been found to be more fruitful for its members, being more equitable and resulting in inclusive growth for all, like in the case of Amul.

These cooperatives play a crucial role in promoting self-reliance, financial inclusion, and rural development, particularly in agriculture, dairy, fisheries, banking, housing, consumer services, labour, sugar etc.

These cooperatives compete in the market alongside other players including private enterprises. The cooperatives are registered under the cooperative laws of the respective state/UT and societies which work in multiple states/UTs and are registered under the Multi State Cooperative Societies Act.

The government has promoted and assisted startups and other enterprises in the past for equitable and inclusive growth of the nation.

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Travel From Uran To Gateway Of India In AC Boats Soon! E-ferries Set To Hit Waters In 2 Weeks; Travel Time To Reduce

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Mumbai: The travel time between Uran and the Gateway of India will be cut in half with the introduction of electric ferries in about two weeks. Speed trials are currently underway and the service is expected to begin soon, according to reports quoting an official from the Jawaharlal Nehru Port Authority (JNPA).

In December 2024, JNPA approved a Rs 37.8 crore lease for two electric ferries over a 10-year period. The boats were initially scheduled to begin operations in January, but technical delays pushed the launch back.

Currently, wooden passenger boats take over an hour to complete the journey, but the e-ferries will reduce travel time to just 30-40 minutes. This upgrade will majorly benefit local residents, JNPA personnel and officials from customs, the air force, CISF and ports who frequently use the route.

Each ferry will accommodate 20-24 passengers, and tickets will be available for purchase online, said JNPA chairman Unmesh Sharad Wagh. The frequency and schedule of the ferries will be determined based on demand.

Details On Routes Of New E-Ferries

The new service will operate between the Gateway of India and JNPA via the sea route, while during the foul weather season, it will run from Bhaucha Dhakka to JNPA. This initiative aims to make commuting more efficient and comfortable for passengers.

The journey from Mumbai to Jawaharlal Nehru Port (JNP) will be significantly shortened, saving passengers up to 20 minutes, with a total travel time of 30-40 minutes. The ferries will also enhance passenger comfort with air-conditioned seating, improving the overall travel experience.

These e-ferries are part of the Harit Sagar, or ‘Green Port,’ initiative, which focuses on sustainable port operations and minimizing environmental impact. Launched by the Ministry of Ports, Shipping, and Waterways (MoPS&W), the initiative aims to achieve net zero emissions by 2047 and increase renewable energy usage across major ports by 60 per cent. The introduction of pollution-free, environment-friendly ferries aligns with this vision, marking a step toward cleaner and more sustainable maritime transport.

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Special drive led to declaration of foreign assets, income of Rs 30,300 crore: FM Sitharaman

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New Delhi, March 26: Union Finance Minister Nirmala Sitharaman said that a special campaign carried out by the Income Tax Department has led to the declaration of foreign assets and income to the tune of Rs 30, 300 crore after over 30,000 taxpayers revised their income tax returns or filed belated returns for 2024-25.

The Finance Minister said in the Lok Sabha that SMS and e-mails were sent to around 19,501 taxpayers, asking them to review their income tax returns based on information collected by the Income Tax Department on foreign deposits.

She said the “nudge campaign” resulted in 11,162 taxpayers revising their tax returns and filing the Schedule Foreign Assets Form, declaring total assets of Rs 11,259.29 crore and disclosing foreign income of Rs 154.42 crore. Another 883 taxpayers revised their ITRs and corrected their status from resident to non-resident in the revised return for 2024-25.

An additional 13,516 taxpayers declared foreign assets of Rs 7,564 crore and foreign income of approximately Rs 353 crore in their revised ITR for 2024-25.

The Income Tax Department launched a compliance-cum-awareness campaign, aimed at encouraging voluntary disclosures of offshore wealth and income. The drive focused on a data-driven and non-intrusive approach, which led to a 45.17 per cent year-on-year jump in voluntary disclosures in 2024-25 compared to 2023-24.

According to sources, tax authorities received financial information from over 108 countries regarding foreign accounts and income in the form of interest and dividends earned outside India by its citizens.

The number of taxpayers disclosing foreign assets and income voluntarily has shot up from 60,000 in 2021-22 to 2,31,452 taxpayers in 2024-25.

India is one of the early adopters of Common Reporting Standards (CRS) and has been receiving data since 2018.

More than 125 countries have agreed to share financial information of individuals linked to other jurisdictions on an automatic basis, including details of accounts held, account balances, dividends, interest received, and gross payments.

A similar exchange occurs with the US under the Inter-Governmental Agreement under the Foreign Accounts Tax Compliance Act (FATCA), 2010.

Using this data received under the automatic exchange of information, the Central Board of Direct Taxes (CBDT) launched a Compliance-Cum-Awareness Campaign on November 17, 2024, urging taxpayers to declare their foreign assets and income in revised Income Tax Returns (ITRs) for Assessment Year (AY) 2024-25.

This campaign followed a system-driven and taxpayer-friendly approach, utilising the information received through CRS and FATCA.

The Income Tax Department also facilitated taxpayers by providing a step-by-step guide to filling out Schedule Foreign Assets and Schedule Foreign Source Income, along with explanatory materials to help them understand the information received under these frameworks.

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