Positive Outlook For Karnataka State Compelled To Revise Expenditure Ceiling

Bangalore, February 27: | Updated: Feb 28 2003, 05:30am hrs
Drought for a second year in succession leading to shortfall in realisation coupled with fall in Central devolution has compelled the Karnataka government to "impose a revised expenditure estimates ceiling and hard budget constraints".

Making his customry address to the joint session of the state legislature here on Thursday, state Governor TN Chaturvedi described the outlook for 2003-04 as "positive tempered with caution".

The Governor said the government would strive to raise additional resources to tide over the hard times. However, the government took credit in passing the Fiscal Responsibility Act and several other measures which helped the state to emerge as a model to others in the country.

The Governor also said that the state government, in association "with the Confederation of Indian Industry and Software Technology Park of India (STPI), has chalked out a strategy for the creation of one million jobs by 2010 with expertise provided by McKinsey and Company. In order to achieve this the millennium BPO policy was unveiled this year to encourage the creation of new employment opportunities in the state".

Mr Chaturvedi said the financial closure of the proposed new international airport was expected to be achieved by May and construction would commence by June. The promoters of the venture had completed preparatory works such as the traffic study and business plan, the master plan and the financial model. Approval of the concession agreement and amendment to the Airports Authority of India Act were awaited from the Union government, he added.

On state PSUs disinvestment, Mr Chaturvedi said a high-power committee is examining the status of 12 units and it would make its recommendations on privatisation, closure or restructuring.

Describing the drought condition in the state as "bad", Mr Chaturvedi said the government had requested for an additional Central cash assistance of Rs 287.60 crore for continuing the relief works. While acknowledging the assistance from the Centre so far the governor however said "it was inadequate to provide succour to the drought affected".

"My government is fully aware that in the coming months, the impact of drought on the drinking water situation would be extremely severe in most parts of the state," he said.

Opposition parties in the state assembly described the governor's address as `old wine in a new bottle'. They said it lacked any creative suggestions to address the crucial issues such as drought, fiscal deficits etc.