Implications of Karnataka

State Budget: 2024-25

Dr. Sharath Kumar

Principal & Assistant Professor of Economics

Government First Grade College – Yagati

Email: [email protected]

Mobile: 8971362093
 Budget Meaning
Origin : In early 15th century, Budget word derived from French word ‘bougette’ which implies
"leather pouch, small bag or sack.

15 $ೇ ಶತ)ಾನದ ಆರಂಭದ12, ಬ5ೆ6 ಪದವ9 :ೆ;ಂ< ಪದ '>ೌ@ೆ6' Aಂದ ಹುDEFೊಂHತು, ಇದು "ಚಮMದ Nೕಲ, ಸಣR Nೕಲ
ಅಥUಾ NೕಲವನುV ಸೂNಸುತWXೆ.

Definition : “An estimate of income and expenditure for a set period of time”

!ಗ#ತ ಅವ()ೆ ಆ,ಾಯ ಮತು1 2ೆಚ4ದ ಅಂ,ಾಜು

Indian Context : The first budget of India was submitted on 18 February 1869 by James Wilson. James
Wilson is known as the father of Indian budget.

According to Article 112 of the Indian Constitution, the Union Budget of a year, also referred to
as the annual financial statement, is a statement of the estimated receipts and expenditure of the government for that
particular year. In India, Financial Year is from 1st April to 31st March. 8ಾರ:ೕಯ ಸಂ=>ಾನದ 112 Bೇ =(ಯ ಪDEಾರ,
ಒಂದು ವಷIದ EೇಂದD ಬKೆL ಅನುM 2ಾNIಕ ಹಣEಾಸು RೇSEೆ ಎಂದೂ ಸಹ ಉWೆXೕYಸWಾಗುತ1,ೆ, ಇದು ಆ !#Iಷ[ ವಷIದ ಸEಾIರದ
ಅಂ,ಾಜು \]ೕಕೃ:ಗಳ` ಮತು1 2ೆಚ4ಗಳ RೇSEೆaಾb,ೆ. 8ಾರತದdX, ಹಣEಾಸು ವಷIವe ಏgDh 1 iಂದ jಾkI 31 ರವmೆ)ೆ ಇರುತ1,ೆ.
 Process of Budget

• First Stage : Process - ಪ"#"$

Preparation of budget starts late August/Early September

• Second Stage : Budget Circular - ಬ&ೆ( ಸು,ೊ.ೕ0ೆ

Budget circular issued by the Finance Department to all state

Ministries, autonomous bodies for preparation of Revised Estimates of current

financial year, and Budget Estimates for the next financial year.
• Third Stage : Discussion

Ministries discuss their Budget Estimates with the Planning Commission/Niti Ayoga and they provide
details of;

a) Revised Estimates (Current Financial Year)

b) Budget Estimates (Forthcoming Financial Year)

c) Actuals (Previous Financial Year)

RE allow the government to re-allocate funds among various ministries based on the implementation
of the budget. However, BE depends on the expected availability of funds with the Finance Department for the
next Financial Year.

In January, estimated receipts of current FY finalized and focus shifts to expenditure in the coming fiscal year.
• Fourth Stage: Clarification

The Finance Department examines budget proposals by various

ministries with CM consultation and brief in front of cabinet about progress of the
Budget. If any ministry has conflict or clarification needed, the finance department
resolves such issues in the Cabinet.

• Final Stage: Submission

Final document is prepared by the Budget Division. Finance

Department takes permission from the Governor to present the Budget in the
Assembly.
 Various indicators of deficit in the Budget

• Budget deficit = Total expenditure – total receipts

• ಬ&ೆ( 1ೊರ,ೆ = ಒಟು6 ಖಚು9 - ಒಟು6 ;<ೕಕೃ?ಗಳB
• Revenue deficit = Revenue expenditure – revenue receipts
• ಆDಾಯ 1ೊರ,ೆ = ಆDಾಯ GೆಚH - ಆDಾಯ ;<ೕಕೃ?ಗಳB
• Fiscal Deficit = Total expenditure – total receipts except borrowings
• ಹಣ1ಾ;ನ 1ೊರ,ೆ = ಒಟು6 ಖಚು9 - LಾಲಗಳನುN OೊರತುಪQ; ಒಟು6 ;<ೕಕೃ?ಗಳB
• Primary Deficit = Fiscal deficit - Interest payments
• Rಾ"ಥTಕ 1ೊರ,ೆ = ಹಣ1ಾ;ನ 1ೊರ,ೆ - ಬQU Rಾವ?ಗಳB
• Effective revenue Deficit = Revenue Deficit – grants for the creation of capital assets
• ಪWXಾಮ1ಾW ಆDಾಯ 1ೊರ,ೆ = ಆDಾಯ 1ೊರ,ೆ - ಬಂಡGಾಳ ಆ;.ಗಳ ಸೃ\6]ೆ ಅನುDಾನ
Challenges of Indian
Economy

Problems
Ø Growth without Jobs
Ø Growth without Equality
Ø Growth without Environment

Solutions
Ø Inclusive Growth
Ø Sustainable Development
Okun's law
The Okun's law (1962) states that a one-point increase in the cyclical unemployment rate is associated with two
percentage points of negative growth in real GDP. The relationship varies depending on the country and time period under
consideration, that is negative relations between unemployment rate and real GDP growth rate.

Unemployment Rate vs GDP

Annual Unemployment Growth %

10.0

9.4 9.4
9.0

8.4
8.0 8.0

7.3
7.0

6.3
6.0 6.0

5.2
5.0
4.9

4.0
5.0 5.5 6.0 6.5 7.0 7.5 8.0 8.5 9.0 9.5 10.0

Real GDP Growth Rate %

 Trends in current health expenditure as a percentage of GDP in India and world, 2000-2016

India Brazil China Sub-Saharan Africa (excluding high income) World OECD members

12.6
12.0 11.7
11.8

9.7
10.0 9.3 10.0

8.6 8.4
8.0

6.6
6.0

5.1 5.2
4.0

2.0 4.0 4.3 4.2 4.0 4.0 3.8 3.6 3.7 3.6 3.6 3.7
3.5 3.5 3.5 3.3 3.2 3.3

0.0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Source: Author illustration based on database from the World Health Organization on Health Indicators, 2020
 Out-of-pocket expenditure as percentage of current health expenditure across the world, 2000-2017 (In %)

USA Norway India Brazil Russia China Low-income Nations Linear (Low-income Nations)
80.0
74.1 73.4 73.4 72.5 73.1 72.3
71.7 70.8 69.1 69.1
70.0 66.8 65.2 67.0
63.0 64.7 63.2
62.2 62.4
60.0 60.1
49.1 47.9 49.2
50.0 47.1 46.7 45.3 46.3 46.1
45.1 45.0 44.0 43.1
42.0 43.1
40.7 40.4 40.2 40.2
40.0
36.6 36.1
30.0 30.2
27.5
20.0 17.9 17.0 16.8 16.6 16.8 16.7 16.5 16.1
15.5 15.7 15.3 15.0 15.2 14.8 14.6 14.4 14.1 14.3 14.2
11.0
10.0

0.0

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Source: Author illustration based on database from the World Health Organization on Health Indicators, 2020
Career Guidance for BA
and Bcom Students
 • Accounting and Auditing
Opportunities • Tax Advisory Services
specifically for • Financial Services
• Commercial Banking
B.Com Students
• International Banking
• Insurance Services
• Telecommunication Services and BPO’s
• Manufacturing Services
• Government Services
• Other Sectors includes Automobile,
Hospitality, Media, Information
Technology Services
Opportunitie
A. Government Jobs :
Government, Private, Central and State
Government Jobs
s for BA
Police and Defense,
Banking Jobs • Ex: UPSC and KPSC
• Teaching and Non-Teaching jobs

Students
B. Private Jobs : Regular,
C. Police and defense: PSI,
part time and own
PC, Military
business

D. Banking and Insurance:

E. Own Business:
IBPS, KVG, LIC, Post office
Entrepreneurs
etc.
 Goals vs. Targets

For Virat Kohli, the

goal is to win the
IPL cricket
tournament

The target is to score

14 and winning each
match
21