The demonetisation exercise caused “great” distress to people and hit Karnataka’s revenues from stamps and registration, causing a shortfall of Rs 1,350 crores during 2016-17, chief minister Siddaramaiah said, on March 15, 2017. Questioning the need and rationale of demonetisation, Siddaramaiah, who also holds the finance ministry portfolio, in his budget speech for 2017-18, said that banks were simply not geared up for this step and the manner of its implementation exposed the union government’s lack of preparedness.
The chief minister added that the RBI should have foreseen the people’s hardships due to the demonetisation of Rs 500 and Rs 1,000 currency notes and taken steps to mitigate them.
“The entire cooperative sector, crucial for serving farmers and rural folk, came to a stop,” he added. The revenue target for 2016-17 took a major hit due to demonetisation, with registration of various documents like sale deeds, etc., decreasing by 25%. “As a result, we expect a shortfall of almost Rs 1,350 crores and expect to achieve Rs 7,750 crores by March end.
“The revenue collection target for 2017-18 is fixed at Rs 9,000 crores, compared to Rs 9,100 crores fixed for the year 2016-17,” Siddaramaiah said.
The government has decided to rationalise Article 37 in the schedule of the Karnataka Stamp Act 1957, to boost tax collection and also tweak Article 20 (4) of the Companies Act, in respect of amalgamation of companies, Siddaramaiah added.