Karnataka budget: CM allocates ₹52,000 cr welfare funds on 5 guarantee schemes
The chief minster announced ₹1,20,373 crore for welfare programmes, of which a whopping 43% (Rs55,000 crore) has been set aside for the five welfare schemes.
Bengaluru: Karnataka chief minister Siddaramaiah on Friday presented his 15th Budget, announcing an outlay of Rs.3.71 lakh crore for the state this financial year. He highlighted projections of Karnataka’s economy expanding by 6.6% in the financial year 2024-25.
Despite a presenting revenue deficit budget, the chief minister pinned his hopes on the government’s guarantee schemes to ensure the party’s success in the upcoming Lok Sabha election.
Siddaramaiah announced Rs.1,20,373 crore for welfare programmes, of which a whopping 43% (Rs.52,000 crore) has been set aside for the five guarantee schemes– Shakti, Gruhajyoti, Gruha Lakshmi, Yuvanidhi and Annabhagya.
“Through the five guarantee schemes, we are putting Rs.52,000 crore in the hands of crores (millions) of people… an average of Rs.50,000 to Rs.55,000 is transferred to each family every year through these guarantee schemes,” Siddaramaiah said.
“The positive economic and social impact of the guarantee schemes will become more clear with time,” he said.
Despite refraining from tax hikes, the budget outlines a substantial increase in net borrowings, exceeding Rs.1 lakh crore.
Siddaramaiah said, “As the nation is adversely affected by steep price rise, unemployment and huge income disparities, the state must increase budgetary allocation towards welfare schemes which directly benefit the poor. While such welfare schemes tend to increase the revenue deficit, such welfare expenditure is necessary to ensure that the fruits of development reach the poorest of the poor.”
“...The achievement of a revenue surplus is meaningless if the state government cannot come to the aid of the poor and needy in times of distress,” he added.
Out of the total outlay of Rs.3,71,383 crore in the current budget, revenue projections indicate an estimated receipt of Rs.2,63,178 crore. This includes Rs.1,89,893 crore from the state’s tax revenue and Rs.13,500 crore from non-tax revenue sources. An allocation of Rs.44,485 crore from tax devolution and Rs.15,300 crore as grant-in-aid from the Government of India is anticipated.
Alongside these revenue sources, the budget anticipates gross borrowings of Rs.1,05,246 crore, non-debt capital receipts of Rs.38 crore, and loan recoveries totalling Rs.213 crore. Cumulatively, the budget forecasts total receipts of Rs.3,68,674 crore for the fiscal year 2024-25.
Nevertheless, the state’s total liabilities are capped at Rs.6,65,095 crore, equivalent to 23.68% of the Gross State Domestic Product (GSDP). Additionally, the fiscal deficit for the year 2024-25 is projected at Rs.2,981 crore, amounting to 2.95% of the GSDP.
Defending the revenue deficit budget, Siddaramaiah said, “Although I have presented a revenue deficit budget, and increased the budgetary allocation for welfare programmes… I have successfully ensured fiscal consolidation by keeping the fiscal deficit within 3% of GSDP and total outstanding liabilities within 25% of GSDP without compromising the capital expenditure.”
Attacking the Bharatiya Janata Party-led Union government, the chief minister alleged discrimination in devolution of funds and said, “The collection of cess and surcharges for 2023-24 has increased by 153%. …If cesses and surcharges are shared with the states, a total of Rs.11,34,301 crore was available for devolution for all states. Due to non-sharing of cesses and surcharges by the Union government, the state suffered a loss of Rs.45,322 crore in the last seven years.”
“Unscientific implementation of GST, increase in cesses and surcharges and change in allocation formula- these three injustices meted out by the central government coupled with the short release of funds to the states have adversely affected the financial strength of all the states of the country. As the ruling party in several states are same as that in the Centre, these states are unable to raise their voice against the injustices meted out against them,” Siddaramaiah added.
The statements were however met by an uproar from the Opposition benches with the Leader of Opposition R Ashoka shouting slogans against the alleged financial mismanagement of the Congress government.