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4w ago

CAG Flags Fiscal Strain From Karnataka’s Guarantees, Citing Borrowing Surge and Capex Cut

The audit warns deficits and debt will climb without subsidy rationalisation, sharpening scrutiny of the five welfare programmes.

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The schemes — Gruha Lakshmi, Gruha Jyothi, Anna Bhagya, Shakti, and Yuva Nidhi — were allocated ₹36,537.96 crore for the financial year, with almost the entire amount utilised (PTI)
Chief Minister Siddaramaiah, in the past, has asserted that Karnataka is at number one position in per capita income in India due to his govt's five guarantee schemes | X/@siddaramaiah

Overview

  • The audit tabled in the Assembly finds the five schemes absorbed 15% of 2023–24 revenue expenditure, with ₹36,537.96 crore almost fully spent.
  • Overall spending rose 12.54% against 1.86% revenue growth, resulting in a ₹9,271 crore revenue deficit and lifting the fiscal deficit to ₹65,522 crore.
  • To bridge the gap, the state raised about ₹63,000 crore in net market loans—₹37,000 crore more than the prior year—which the CAG says will create a heavy near-term repayment burden.
  • Capital outlay fell by ₹5,229 crore and incomplete projects rose 68%, a compression the auditor warns could hurt future growth.
  • The report points to a medium-term plan projecting a ₹27,354 crore revenue deficit and borrowings of about ₹1.05 lakh crore, even as the finance department defends the schemes’ social gains and the opposition brands them a debt risk.