Bommai criticises Karnataka state budget, warns of economic downturn

In a scathing critique of Chief Minister Siddaramaiah's 15th budget presentation, BJP leader and Former Chief Minister Basavaraj Bommai expressed concerns over the fiscal direction of the state, asserting that "Development is not possible from Dasoha without Kayaka" (charity without work).

Bommai argued that the budget lacked a focus on development, emphasising that spending on welfare schemes in the absence of income-generating activities would lead the state towards bankruptcy.

"All of them were waiting to see how the CM would manage the 15th Budget. Siddaramaiah has spoken about Kayaka and Dasoha and this has been the culture of Karnataka. Dasoha would be there only if there was Kayaka and only Dasoha was of no use. The Kayaka-oriented schemes must be formula. Dasoha out of money earned through the Kayaka was acceptable. But seeing the budget it would given an impression that the Kayaka was not much as they expected. Not taking productivity and distribution would not be of no meaning for the Kayaka and Dasoha."

"The CM had said that the previous government had given impetus for the food security and the incumbent government too had given equal importance for the food security. The central government had been giving five kg of rice free of cost. The rice the people of Karnataka was getting had been given by the union government," he added.

He stressed the need for resource mobilisation without compromising capital expenditure.

"There was lot of difference between Siddaramaiah-1 and Siddaramaiah 2.0. In 1994, he was the finance minister and it was the deficit budget. At that time, he decreased the plan size, presented the budget and brought in financial discipline. But, Siddaramaiah -2.0 should have mobilised resources for the welfare schemes and implemented five guarantees without affecting the capital expenditure."

Bommai also raised concerns about the government's borrowing practices, stating that despite borrowing Rs 1.5 trillion, only Rs 1,000 crore was allocated for capital expenditure, which he deemed insufficient for development.

"According to the budget, there were 103 committed expenditures but where was the capital for development? Nearly, 61 per cent of the earning goes towards expenses. Only Rs 55,000 crore had been earmarked for development as the rest would go towards repayment of the mounting debt. The government hiked stamp and registration, motor vehicle and excise tax, but the government borrowed Rs 8,000 crore . Despite a revenue of Rs 13,500 crore there was hardly any money for development. This year, the government has borrowed Rs 1.5 trillion and of which only Rs 1,000 crore goes towards the capital expenditure and this was not at all sufficient for development. Already, the 7th pay commission had been constituted and that would require Rs 20000 crore if it was implemented. No money has been earmarked for this purpose. If the government goes on giving guarantees from where the funds come?," Basavaraj Bommai said.

The BJP leader said, "Siddaramaiah has claimed of collecting Rs 1.75 trillion last year but the actual collection was Rs 1.61 trillion through collection of taxes."

He compared the targets set by the previous BJP government with the current government's, noting a lack of income despite an ambitious tax collection goal of Rs 1.89 trillion.

"That means, there was a short fall of Rs 14,000 crore in capital revenue. The previous BJP government had set a target of Rs 1.64 trillion from various taxes but they could not mobilise that much of resources. The present government has set a target of Rs 1.89 trillion tax collection but there was no income at all. How it was possible to develop the state if the state finance was handled in such a manner. In the service sector, the government claimed to have spent RS ,96,000 crore but hardly spent RS 94,000 crore and similarly, I the economic front, Rs 63,000 crore had been spent as against the target of Rs 67,000 crore. Even borrowing Rs 1.5 trillion was indeed a record and Rs 96,000 crore loan had been taken in open market. Development was possible through the borrowed money but not spending from the money got through revenue. It would plunge the State economy further. In the current dispensation, $2.8 billion FDI has come to Karnataka against $10 billion during the previous BJP regime. There had been a drop of 41 per cent in FDI and as many as 31 companies have left Karnataka and went to different places including Singapore.

Drawing attention to the decrease in Foreign Direct Investment (FDI) and the departure of companies from Karnataka, Bommai warned that the state's development could face setbacks if financial management was not addressed promptly.

"The state development would receive set back if the Congress government without any preparation, spend Rs 54,000 crore in one year. The state would go back 10 years if the projects were not implemented in two or three years. Spending without increasing the revenue collection would not help in development. Under the Griha Jyoti, Bhagya Jyoti schemes, free power was given to BPL families and this was not new. The state has said that Rs 18,000 crore lroposalhad been submitting the centre as drought damage. Even the Manmohan Singh government released funds after nine months. The previous BJP government did not keep quiet when the floods ravaged several districts but distributed Rs 13,000 crore compensation as crop damage relief. The Congress government should have exhibited it's commitment and released the relief amount to farmers. Already, Rs 6,000 crore has come from the centre and what's the achievement of the Congress government?," he said.

Bommai criticised the state government's execution of various schemes, noting that only 56 per cent of allocated funds to departments had been spent.

"As much as 48 per cent in Minorities Welfare and backward classes, 50 per cent ScP/TSP, 55 per cent in agriculture, 59 per ventnin health, 65 per cent in higher education, 69 per cent in Major industries and 69 per cent in PWD. The BJP government had earmarked Rs 19,000 crore for irrigation as against Ra 16,000 crore by the present government. Each MLA was given a grant of Rs 2 crore but now hardly given Rs 35 lakh for each of them. They had given Rs 25 crore for each legislator. The Congress government has hiked the loan limit to 2.9 per cent but it would cross 3 per cent next time. The finance management has been very bad and unable to ensure social justice," he said.

In conclusion, Bommai urged the government to clarify its stance on crucial issues, including pension schemes for state government employees and the implementation of the Other Post Employment Benefits (OPS).

Bommai emphasised that blaming the central government for financial woes was an attempt to cover up the state government's mistakes

"The state financial position is very precarious and the government would be blamed if something goes wrong in the coming days," he concluded.