Guarantees vs growth Karnataka budget bind
The Karnataka government is pruning allocations to the five guarantee schemes credited with bringing the Congress back to power in 2023. It plans to do so not by cutting overall outlays, but by weeding out ineligible beneficiaries across the schemes. The move is welcome, though it should have been instituted from the outset to ensure that only eligible beneficiaries received the benefits.
Soon after assuming office in May 2023, the government rolled out the five guarantees: Gruha Lakshmi, which provides ₹2,000 a month to the woman head of a household; Gruha Jyothi, which offers free electricity up to 200 units; Anna Bhagya, which supplies free foodgrains to below-poverty-line families; Shakti, which enables free travel for women in non-premium state-run buses and Yuva Nidhi, which provides a monthly unemployment allowance of ₹3,000 to graduates and ₹1,500 to diploma holders for up to two years. A significant share of the total allocation goes to Gruha Lakshmi. Since its launch, ₹57,300 crore has been disbursed to 1,24,12,543 women beneficiaries. In the July 2023 supplementary budget, Chief Minister Siddaramaiah, who also holds the finance portfolio, earmarked ₹35,410 crore for eight months for the guarantee schemes. The outlay rose to ₹56,000 crore in 2024-25. In the current financial year, the allocation stands at about ₹51,000 crore, with the moderation attributed to the gradual removal of ineligible beneficiaries.
As the 2026-27 state budget approaches, the chief minister faces a delicate balancing act. Apart from Opposition criticism, even ruling party legislators have complained about inadequate development funds for their constituencies. The Karnataka State Contractors’ Association has threatened to halt infrastructure works on the eve of the budget presentation, likely on March 6, citing delays in clearing pending dues. It claims that bills amounting to ₹37,370.76 crore remain unpaid across major boards and departments, including the Irrigation Department, Greater Bengaluru Authority, Housing Department, Waqf Board, Slum Development Board, Urban Development Department and Water Resources Department. The government appears caught in a guarantees-versus-development bind, bringing its fiscal prudence under a cloud. Given the political weight of the schemes, any further pruning will be closely watched by the Congress leadership in New Delhi, which views Karnataka as central to its future prospects.