Karnataka budget allocates ₹55,000 crore to 5 guarantee schemes

Karnataka Chief Minister Siddaramaiah presented the state's 15th budget with an outlay of 3.71 lakh crore for the financial year, emphasizing a 6.6% expansion in Karnataka's economy for 2024-25. Despite a revenue deficit budget, Siddaramaiah allocated ₹55,000 crore, 43% of the welfare fund, to five guarantee schemes—Shakti, Gruhajyoti, Gruha Lakshmi, Yuvanidhi, and Annabhagya. The Chief Minister aims to bolster the party's prospects in the upcoming Lok Sabha election through these welfare initiatives, acknowledging increased borrowings exceeding ₹1 lakh crore due to economic challenges.

CM Siddaramaiah's budget allocates ₹55,000 crore for five guarantee schemes, ensuring substantial financial support to millions of beneficiaries. These schemes aim to transfer an average of 50,000 to 55,000 annually to each family. Despite refraining from tax hikes, the budget foresees increased borrowings to address economic disparities, unemployment, and rising prices.

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.”

Siddaramaiah justifies the revenue deficit budget by prioritizing welfare schemes, defending the fiscal consolidation with a fiscal deficit within 3% of the Gross State Domestic Product (GSDP) and total liabilities within 25% of the GSDP. He criticizes the Union government for discriminatory fund devolution and financial mismanagement, leading to a loss of ₹45,322 crore for Karnataka in the last seven years.