Freebies over development? K'taka cuts programs to fund welfare schemes: CAG report

NEW DELHI: The Karnataka government’s increasing expenditure connected payment schemes has placed unit connected its finances, forcing cuts successful immoderate ongoing programmes, the Comptroller & Auditor General (CAG) said successful its study for the 2024-25 fiscal, tabled successful the Assembly connected Thursday.

Guarantee schemes devour important revenue

The CAG noted that the authorities spent Rs 52,525 crore connected 5 warrant schemes — Shakti, Gruha Lakshmi, Gruha Jyoti, Yuva Nidhi and Anna Bhagya, successful 2024-25. The study said this accounted for astir 20% of gross receipts and 27% of the state’s ain revenue, highlighting the schemes’ dense load connected the budget.“Though the gross maturation is stable, it is insufficient to sorb the recurring costs of the warrant schemes and hence the authorities needs to trust connected borrowings to money the warrant schemes,” the study said.

During 2024-25, portion the state’s gross roseate by 10.63%, its expenditure grew by 14.99%, mostly owed to the warrant schemes.

Cuts to different programmes and rising borrowings

The CAG highlighted that rising subsidies compelled the authorities to trim funds for immoderate ongoing programmes, including nutrition, assistance to section bodies, gram panchayats successful agrarian improvement programmes and municipality improvement initiatives.The mismatch betwixt receipts and expenditure contributed to a gross shortage of Rs 20,834 crore, portion the fiscal shortage roseate from Rs 65,522 crore successful 2023-24 to Rs 85,030 crore successful 2024-25, reported quality bureau PTI.

To span the gap, the authorities undertook nett marketplace borrowings of Rs 71,525.15 crore, up Rs 8,525.15 crore from the erstwhile year.

Concerns implicit superior expenditure and indebtedness servicing

While wide superior expenditure roseate by Rs 5,786 crore, the study said existent concern successful infrastructure accrued by lone Rs 3,284 crore aft adjusting for cardinal assistance, investments, and off-budget borrowing. The CAG warned that this “compression successful gross superior enactment whitethorn beryllium detrimental to aboriginal maturation prospects.”It further noted that higher borrowing would summation indebtedness servicing obligations, which could assemblage retired spending connected developmental, infrastructure, and payment measures. The study cautioned that continued borrowing maturation could hazard breaching the Karnataka Fiscal Responsibility Act (KFRA) fiscal targets.