In his 15th budget presentation on Friday, Karnataka chief minister Siddaramaiah who is the only finance minister to have presented as many, took the opportunity to blame the central government for its “unscientific implementation of GST”, which led to the state having a revenue deficit budget. He highlighted that the stepmotherly treatment meted out by the Centre caused Karnataka a loss of Rs 59,000 crore.
Siddaramaiah presented a second consecutive revenue deficit budget but emphasised that the Congress continues to remain committed to funding its five guarantee schemes, which brought the party to power in the assembly polls last year.
“For the financial year 2024-25, revenue deficit is estimated to be Rs 27,354 crore. Fiscal deficit is estimated to be Rs 82,981 crore, which is 2.95% of GSDP. Total liabilities at the end of 2024-25 are estimated to be Rs 6,65,095 crore, which is 23.68% of GSDP,” the CM said in his budget speech. “I have ensured fiscal discipline by keeping the fiscal deficit within 3% of GSDP and outstanding liabilities within 25% of GSDP. Further, I am confident of achieving revenue surplus after the next 2 years as projected in MTFP.”
The five guarantee schemes—Gruha Lakshmi, Gruha Jyothi, Yuva Nidhi, Anna Bhagya, and Shakti—will enable the government to “put Rs 52,000 crore in the hands of the people during 2024-25”. An average of Rs 50,000 to Rs 55,000 is transferred to each family every year through the guarantee schemes, the CM said.
Congress Aims for Political Dividends
Siddaramaiah underscored the Congress’s dedication to funding the five schemes. The guarantees worked in favour of the party in Karnataka but did not wield the same level of influence in other states like Rajasthan and Madhya Pradesh. The Congress hopes to reap political dividends with these guarantees in the upcoming Lok Sabha polls. After relying solely on guarantees to come to power in May last year, Siddaramaiah was under pressure to announce more welfare schemes for other sections of society by his ministers and legislators, sources said.
There were protests and a walkout staged by the opposition Bharatiya Janata Party (BJP) and Janata Dal (Secular) during the presentation, accusing Siddaramaiah of misusing the budget session to target the central government. BJP’s state president BY Vijayendra called it a regressive budget, one that was being used by the CM to politically instigate the public with no benefits for the people, youth, or farmers of the state.
Bolstering Bhagyas
Siddaramaiah earmarked Rs 52,200 crore, constituting 43% of the total welfare scheme allocation of Rs 1,20,373 crore, to address “price rise, unemployment, and income disparities”. Despite an estimated revenue deficit of Rs 27,354 crore and a fiscal deficit of Rs 82,981 crore, he defended the welfare expenditure, emphasising its necessity to uplift the underprivileged. Under the guarantee schemes, Rs 55,000 is being transferred to each family annually, he said.
Siddaramaiah accused the BJP of falsely portraying the state’s economic distress due to guarantee schemes as “freebies” or “Bitti Bhagyas”, criticising it for failing to address the people’s needs.
“Our opponents are making all efforts to lower our morale by negative propaganda that the government has gone bankrupt and the economy has collapsed in the state due to guarantees, which they describe as freebies or Bitti Bhagyas. Those who failed to respond to the distress call of the people are now criticising us to cover their faults,” said Siddaramaiah, while accusing the BJP of “stealing the schemes” and passing them off as its own.
Contrary to allegations of election gimmickry, Siddaramaiah pointed out that the schemes were in response to the feedback received during the Bharat Jodo Yatra, striving to create employment, enhance purchasing power, and foster a fair and just society by redistributing wealth.
Drought Relief Criticism
Accusing the Centre of neglecting drought relief, Siddaramaiah said that between 2023-24, the Karnataka government declared drought in 223 talukas and submitted several memorandums to the central government, seeking an allocation of Rs 18,171 crore to provide relief to affected farmers.
He accused the Centre of not considering Karnataka’s request and said the responsibility fell on his government to take measures to mitigate the severity of the drought situation.
“Rs 629 crore has been released for input subsidy to 33.19 lakh farmers up to Rs 2,000 per head and mini fodder kits at the cost of Rs 20 crore were distributed to reduce the severity,” the CM said, once again attacking the Centre for its dismal fund allocation and likening it “to feeding an elephant with half-a-penny-worth buttermilk”.
He outlined that Karnataka suffered a total loss of Rs 1.21 lakh crore since 2018 due to natural calamities occurring each year and the Centre had released only Rs 9,300 crore since 2018, and the state government spent Rs 15,874 crore from its exchequer through various departments.
Siddaramaiah pointed out that during the UPA regime, several pro-people schemes, aiming to provide essentials like food security, healthcare, education, employment, and housing were implemented.
“The anti-people decisions of the central government for the last 10 years have led to alarming developments such as widening inequality, concentration of wealth in few hands and crony capitalism,” he said.
Underground Tunnels for Easing Traffic and Brand Bengaluru
Siddaramaiah announced plans to resolve traffic congestion in Bengaluru through underground tunnels and all-weather roads. The peripheral ring road will be repositioned as Bengaluru Business Corridor, with Rs 27,000 crore allocated for construction.
He also said that under the Sugama Sanchara-Brand Bengaluru concept, an expert organisation of international repute has been engaged where based on their report, measures will be taken to ease traffic congestion in the city.
“On a pilot basis, a tunnel will be constructed this year at Hebbal junction where there is high traffic congestion,” the CM stated.
Under the peripheral ring road scheme, a 100-km road is already being developed at a cost of Rs 200 crore and an additional 100 km of roads will be developed. Plans to develop the Bengaluru Business Corridor to address traffic congestion and promote large-scale economic activities in Bengaluru are also afoot.
“Under this project, RFP has been invited to construct a 73 km road at a cost of Rs 27,000 crore under the PPP model. It is proposed to start the project this year itself. Internationally renowned architects have been invited to prepare a novel design for constructing a 250-metre-high Skydeck in Bengaluru. It will become a landmark tourist destination in the city,” he said in his budget speech.
It was also announced that an additional 44 km to the existing 74 km of the Namma metro line will be added to the city by March 2025.
A new Knowledge, Healthcare, Innovation and Research (KHIR) City will be established on 2,000 acres near Bengaluru, the CM announced, “The new KHIR City will attract an investment of Rs 40,000 crore and provide employment to about 80,000 people,” he said.
Record Tax Collection
BBMP broke a tax collection record of Rs 4,300 crore in 2023-24, with expectations to reach Rs 6,000 crore in 2024-25. Siddaramaiah highlighted the digitising of property tax records and announced plans for Namma Metro Phase-3 at an estimated cost of Rs 15,611 crore.
Extended Shop Hours to Boost Commerce
Siddaramaiah’s announcement of extended business hours is expected to bring cheer to commercial establishments in the capital city. The administration will allow shops and establishments in Bengaluru and 10 other corporation areas to open till 1 am, aiming to boost trade and commerce.
Cover-up of Congress Failures: BJP
Former CM Basavaraj Bommai said that Siddaramaiah was trying to blame the Centre in order to cover up his failures. “The dual policy of Siddaramaiah is exposed,” Bommai said.
“Siddaramaiah, just to cover up his failures, is trying to bring out subjects which are not in the budget and trying to blame (the) centre unnecessarily. Whatever is expected from the government of India…devolution of funds…it has come. If at all there is a shortage, it is a shortage of (collection) state’s own tax efforts,” the BJP leader said.
Bommai also said that Siddaramaiah had borrowed Rs 1.05 lakh crore and only Rs 1,000 crore (compared to last year) was the additional amount set aside for development.