Chief Minister Siddaramaiah will present his record 16th Budget — the third as the CM in his second tenure — on March 7. The big question is whether the budget will have any concrete measures to dispel the opposition’s campaign that the state is bereft of funds to take up development works while the economy is bogged down by the burden of guarantee schemes.
In the 2024-25 budget with an outlay of Rs 3.71 lakh crore, the CM had allocated Rs 52,000 crore for the five guarantee schemes. Despite many Congress leaders admitting that the schemes have caused a financial strain on the state and suggesting the need to relook at some of them, the government assured the continuation of the five flagship schemes.
With zilla panchayat, taluk panchayat, and Bruhat Bengaluru Mahanagara Palike [BBMP] elections likely to be held this year, the government may not make any changes in the schemes.
Focusing on the welfare initiatives while providing adequate financial allocations for infrastructure development would be a tightrope walk for the CM. The challenge is to do that without burdening the middle class and the poor and also maintaining fiscal discipline. Any measure that burdens people will not bode well with the image of the government that is facing flak over rising prices.
Noted economist and former director of the Institute of Social and Economic Change (ISEC) Prof RS Deshpande says Siddaramaiah is quite skillful and will find some new sources of revenue. He says while it is up to the government to decide how to conduct public expenditure for the welfare of the population, they should have pragmatically thought about getting revenues without hampering aggregate welfare.
Siddaramaiah appears to be confident of deftly handling the complex situation. The CM maintains that Karnataka’s economy remains strong with an 18.3 % average budget growth over the last two years and the state’s own tax revenue growth of 15%. Siddaramaiah also claims that the state is spending 15.01% of its budget on capital expenditure, which is higher compared to neighbouring states Maharashtra (12.74%), Tamil Nadu (10.58%) and Telangana (11.58%).
The recent Lokayukta report giving him a clean chit in the Mysuru Urban Development Authority (MUDA) sites allotment case and over Rs 10 lakh crore investment proposals during the Global Investors’ Meet, seem to have further bolstered his confidence on the political and governance fronts. But, his government is facing criticism from the opposition for neglecting development, while a section of civil society has questioned the administration’s failure to ensure pothole-free roads, walkable footpaths and clean streets.
In the upcoming budget, Siddaramaiah is likely to address some of those issues and also give impetus to infrastructure development in the state capital. DyCM and Bengaluru Development Minister DK Shivakumar has been advocating for many projects, including the tunnel road, which he says will significantly improve traffic flow in the city.
While measures to decongest the city roads and efficient public transport are essential, many experts have expressed serious concerns over the tunnel road project. It would be prudent for the government to commission studies by experts, place data in the public domain, and take all stakeholders into confidence before going ahead with the mega project.
Looking beyond Bengaluru, Siddaramaiah should also consider long-term measures to strengthen the rural economy, stop large-scale migration of people from villages and towns to bigger cities in the state as well as other states, and improve health and education facilities in rural areas. Not that the governments were not aware of these issues, but over the years the measures taken to address them were grossly inadequate and lacked proper planning or commitment.
On the guarantees front, too, an independent and transparent study from a reputed institution could help assess their economic and social impact. Since those schemes are a major part of the budget allocation, the government must not shy away from critical evaluation to achieve the intended goal of empowering people.
Meanwhile, the budget session from March 3 to 21 is expected to be stormy as the opposition BJP and Janata Dal (Secular) are gearing up to take on the government over various issues including price rise, law and order, harassment of borrowers by microfinance firms and diversion of SCSP/TSP (Scheduled Castes Sub-Allocation & Tribal-Sub Allocation) funds for other schemes. The BJP has questioned the government’s claims on the health of the state’s economy and demanded a white paper.
The budget is expected to throw more light on the state’s economy. It will also show if the government has any long-term vision for uplifting the rural economy, sustainable plans for infrastructure development, and taking forward big irrigation and drinking water projects delayed due to various reasons, including approvals from the Centre.