The Karnataka Budget for 2008-09 presented by Union Finance Minister P. Chidambaram had no fanfare, no announcements of new schemes and no new "populist' initiatives. Mr. Chidambaram presented the budget proposals for the State for 2008-09 in the Lok Sabha on Monday. He presented estimates for expenditure and receipts for the current year and sought a vote on account for the first six months of 2008-09, ending September 2008. The imposition of President's Rule in the State in November last year has necessitated parliamentary sanction for all receipts and expenditures. This year's Budget, like every one since 2004-05, presents a revenue surplus, which is estimated at Rs. 2,972.65 crore. Significantly, this has been achieved without any proposals for fresh taxation. An outlay of Rs. 56,542 crore has been made from the State's Consolidated Fund, which is about 12 per cent higher than the budgeted outlay for 2007-08. The Plan outlay for 2008-09, projected at Rs. 21,751 crore, is to increase by 22 per cent. Mr. Chidambaram also presented the supplementary demands for grants for the State for 2007-08. The Finance Minister's statement, tabled along with the Budget papers, reveals that the revenue mobilisation has been under some strain. Although collection from State excise and tax on vehicles have increased by about Rs. 1,600 crore, collections from stamp duty and commercial taxes have been lower by almost Rs. 1,100 crore, compared to the Budget estimates for 2007-08. Mr. Chidambaram said the Budget sought to promote "growth with equity,' while making "enhanced investments in education, health and social welfare.' However, the revised estimates for the current financial year show that revenue expenditures for several key areas such as education, health, water supply and sanitation, welfare of Scheduled Castes and Scheduled Tribes and backward classes are either stagnant or lower than the budgetary estimates made last year by the H.D. Kumaraswamy government. For instance, the revised revenue expenditure for education in 2007-08 is expected to be Rs. 6,300 crore, compared to the budgeted expenditure of Rs. 6,540 crore. Revenue expenditures related to health also show a similar decline. This is not entirely surprising given the emphasis on keeping to the provisions of the Fiscal Responsibility Act, which prescribes that the fiscal deficit for 2008-09 will be within 3 per cent of projected GSDP of Rs. 2,44,043 crore. Mr. Chidambaram pointed out that Karnataka had maintained a fiscal deficit of less than 3 per cent of the Gross State Domestic Product (GSDP) since 2004-05. It appears that the burden of maintaining a revenue surplus has been borne by the social sector, which has a bearing on development in the State, particularly in areas such as health, family welfare, education and welfare measures to protect the less privileged. According to Mr Chidambaram, the State will have a closing balance of Rs. 92.27 crore at the end of 2008-09, reflecting a revenue surplus of 1.19 per cent and a fiscal deficit of 2.84 per cent of the GSDP. The Budget assumes that the Karnataka economy will grow by 9 per cent in real terms in 2008-09 and that inflation will be about 4 per cent during the year.