April 01, 2021
As in other States, the Covid-19 pandemic had a disastrous effect on Karnataka’s fiscal health.
The lockdown and closure of economic activities had its effect leaving the State’s own tax revenues in 2020-21 lower than the budget estimate by ₹17,049 crore, and the tax devolution lower by ₹8,538 crore, partly due to lower central tax collections and partly due to the lower tax devolution resulting from the Fifteenth Finance Commission’s award.
M Govinda Rao, Chief Economic Advisor, Brickwork Ratings in his report on Karnataka Budget 2021-22, said “The shortfall in the total revenue receipts in the revised estimate was ₹20,211 crore. As a ratio of the GSDP, the revised estimate of revenue receipts at 5.3 percent was lower than the budgeted by almost one percentage point, and it was lower than the previous year’s actual collection by 0.8 percentage point.”