|Title||FISCAL POLICY IN KARNATAKA: PROBLEMS AND PROSPECTS|
Karnatak University, Dharwad, Karnataka- India
The present study highlights the fiscal indicators in Karnataka vis-à-vis comparison with major Indian states and critically examines Karnataka state’s fiscal performance since 2000. The paper overviews the state’s receipts and expenditure heads and fiscal consolidation in Karnataka state since enactment of KFRA 2002, while state fiscal health is sound and appreciable compared to centre and major Indian states with respect to own revenue generation capacity and taxable capacity. The current study attempts to evaluate state’s own revenue generation capacity through various internal-tax and non-tax sources. Moreover, tax effort and tax buoyancy methods used to know state’s own revenue generative capacity and individual tax performance and results showed that total tax buoyancy on an average more than one, hence Karnataka state’s taxable capacity has been doing well since enactment of KFRA act which made fiscal discipline in the state and also contributed for state through better economic performance than national level. However, states fiscal deficit indictors have been performing well than national level but revenue deficit should be addressed which has been performing poor than national level during last decade. Karnataka state’s outstanding liabilities are under 13th finance commission ceiling, even though increasing at absolute value compared to southern states which have been performing well in recent years. The study shows that Karnataka state fiscal position is better than any other Indian states during last decade.