Chief ministerBS Yediyurappais under pressure to fill a large revenue gap in the states finances, but he is unlikely to raise taxes in the forthcoming budget.
The government, experts say, should instead focus on generating more revenue from non-tax sources such as asset monetisation and leverage an additional borrowing window provided by the Centre.
The government had expected tax revenues of more than Rs 1.1 lakh crore in 2020-21, but it is likely to miss the target by at least Rs 5,000 crore because of the economic disruption triggered by the pandemic. Revenue from commercial taxes and duties on liquor sales has improved strongly, but stamp & registration duty and motor vehicle tax collections have lagged.
Karnataka has limited scope to alter taxes in the GST regime. It can propose rates for only commodities such as petroleum products and liquor, apart from property and vehicle registration.