BENGALURU: Former Karnataka Chief Minister Basavaraj Bommai on Thursday said that the state government has breached established norms of fiscal discipline under the Karnataka Fiscal Responsibility Act (KFRA).
He claimed that the state’s total borrowings have now crossed the critical 25% threshold of Gross State Domestic Product (GSDP), a limit intended to ensure long-term financial sustainability.
He said the borrowings are an attempt to obscure the true extent of the debt burden. Bommai pointed to what he termed “unproductive expenses” as the primary driver behind the escalating borrowings.
He said that out of an estimated Rs 8 lakh crore in total borrowings, Rs 5 lakh crore has been accumulated during Siddaramaiah’s tenure. He said that rectifying the state’s finances would pose a challenge for any future administration.
Meanwhile, former CM and Union Minister HD Kumaraswamy alleged that the budget is poised to violate the fiscal deficit limits, potentially exceeding established thresholds that could adversely impact GSDP figures.
“The fiscal deficit is supposed to be kept within 25%, but it looks set to cross that threshold,” he said.
This appears to allude to the broader fiscal constraints under KFRA, where the state’s outstanding liabilities (debt-to-GSDP ratio) are capped at 25%, while the annual fiscal deficit is limited to 3% of GSDP.
Bommai’s remarks come on the eve of Chief Minister Siddaramaiah’s presentation of his record 17th state budget, expected to exceed Rs 4 lakh crore and focus on welfare guarantees, infrastructure, and development amid tight fiscal headroom.
Critics, including opposition parties, have repeatedly labeled Siddaramaiah the “biggest borrowing CM,” citing quarterly borrowings reaching record highs (such as projected Rs 93,000 crore in one quarter) to fund schemes and bridge revenue gaps.