Bengaluru: The Karnataka government on Tuesday has decided to borrow Rs 33,000 crore to cope with the revenue loss owing to the COVID-19 pandemic situation and take up development works.

The news was announced to the media by Law and Parliamentary Affairs minister JC Madhuswamy.

Madhuswamy also said “The state Cabinet meeting has decided to amend the Fiscal Responsibility Act to increase its borrowing limit from 3% to 5% of the GSDP, utilising the provision proposed by the Centre”.

“The Centre this year has increased the borrowing (limit) up to 5% of GSDP due to COVID. Hence, we have decided to change the state Fiscal Responsibility Act to increase our borrowing from 3% to 5%,” Madhuswamy told reporters.

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“After the amendment, the state will be able to borrow Rs 36,000 crore. We have decided to borrow Rs 33,000 crore to start development works, which had been impacted due to severe revenue loss following the COVID-19 pandemic,” he added.

JC Madhuswamy added that the state’s demand for Rs 11,000 crore of its share on GST remains and it will not compromise on that.

The minister clarified that the 2% increase in the borrowing was only a one-time measure in view of the COVID situation.