Karnataka’s newly formed Congress government, led by Chief Minister Siddaramaiah, announced the implementation of its pre-election promise of five guarantee schemes, which are expected to significantly impact the state’s finances. The announcement, made within a fortnight of assuming office, fulfils the commitments that were instrumental in the party’s victorious assembly election campaign.
According to preliminary estimates, these initiatives will impose a hefty burden of Rs 50,000-60,000 crore on the state treasury. Despite this, the government remains hesitant to disclose the exact financial implications of these guarantees. As per internal sources, the projected cost hovers around Rs 60,000 crore, which necessitates drastic reductions in existing welfare schemes and a potential rise in state-controlled taxes.
The Congress-led administration intends to unveil a new budget next month as the current one, put forward by former Chief Minister Basavaraj Bommai in March, lacks the necessary provisions for these guarantees.
During a press conference in Bengaluru after a special cabinet meeting, Siddaramaiah outlined the broad parameters for the election promises. He stated, “We have decided to implement all five guarantees this fiscal year.” However, a high-ranking government official, requesting anonymity, conveyed that the government would need to make significant cuts to existing schemes, streamline expenditures, rationalise spending, and borrow additional capital to mobilise necessary resources.
The five guarantees, dubbed ‘Gruha Lakshmi’, ‘Gruha Jyothi’, ‘Anna Bhagya’, ‘Shakthi’, and ‘Yuva Nidhi’, cover various sectors, including women’s welfare, power consumption, food security, public transportation, and youth employment. Although Karnataka’s debt to GSDP ratio remains manageable, these initiatives are likely to prompt further borrowing, adding pressure to the state’s financial resources, particularly given the dwindling revenue streams as per the 15th finance commission calculations.
Meanwhile, in the political arena, the opposition BJP is grappling with its own challenges. Former Karnataka CM Basavaraja Bommai met with senior BJP leader BS Yediyurappa amidst the party’s internal discussions to decide the Leader of the Opposition, a position that remains vacant after Congress’s triumph in the May 10 elections. Criticising the newly formed government, Bommai accused the Congress of cheating voters regarding the implementation of the five guarantees promised during the elections. However, the Congress government, committed to its mandate, continues to roll out these schemes in a phased manner.