All fingers crossed over state’s fiscal health

Bengaluru: The Karnataka Chamber of Commerce and Industry has given a one-week deadline to the Congress government to roll back the electricity price hike. The chamber has warned that if not, all industries will shut down and resort to a protest.

Former chief minister Basavaraj Bommai has raised concerns over the withdrawal of Rs 1,500 crore allocated towards MSP for farmers in the last budget. He also voiced concern over diverting funds allotted to construct 9,556 school buildings across the state. He warned against cutting funds allotted for the free dialysis facility towards one lakh cycles, free chemotherapy treatment for cancer patients.

Doubts are also raised over providing funds to the metro project, suburban projects to ensure the growth of Bengaluru. These developments are taking place in the backdrop of the newly elected Congress government heralding a new era of freebie politics in Karnataka. The state is known for a robust economy and is one among the top revenue generating states.

Karnataka Chief Minister Siddaramaiah has stated that the government will require Rs 59,000 crores annually to implement the five guarantees promised during the election. The financial requirement is Rs 41,000 crore for the remaining months of the current year.

The Directorate of Economics and Statistics has reported in its advance estimates that the state has recorded a growth of 7.9 per cent in 2022-23. It also stated that per capita income in the state has increased from Rs 2.04 lakh to Rs 3.32 lakh. The state has been maintaining the fiscal parameters prescribed in the Karnataka Fiscal Responsibility Act, 2002 except for a few years of Covid-19 pandemic as the state suffered severely due to the pandemic.

The state’s economy however bounced back, exhibiting fiscal discipline. Former CM Bommai claimed that he was presenting a revenue surplus budget for 2023-24. However, several questions are now being raised as the state government is all set to incur Rs 59,000 crores annual expenditure on freebies. The Opposition is demanding the implementation of the freebies without any conditions -- in case the Congress government bends then the expenditure will rise to Rs 1 lakh crore.

Minister for Law and Parliamentary Affairs H.K. Patil had stated that the state government would be burdened by the implementation of the five guarantee schemes. However, he maintained that the poor will benefit from the schemes.

Siddaramaiah, who holds the record of presenting the state budget 13 times, had said that the budget size of Karnataka is Rs 3.9 lakh crore and mobilizing the funds is not going to be a difficult task. “I have presented seven budgets. I am very much aware of finances,” he said. “When we are spending Rs 56,000 crore as interest every year, can’t we spend Rs 50,000 crore on our

people?” he asked. (IANS)