Pointing to the burden created by the five guarantee schemes of the Government of India, the Comptroller and Auditor General of India (CAG) of India has expressed concern over the financial health of Karnataka. The audit presented in the Legislative Assembly this week shows that these programs were 15 % of the state’s revenue expenditure in 2023-24, forcing them to increase lending and reduce investment in long-term infrastructure projects.
Plans – Gruha Lakshmi, Gruha Jyoti, Anna Bhagya, Shakti, and Yuva Raha – were allotted. 36,537.96 crore, almost the entire amount was used for the financial year. Gruha Lakshmi, who provides 2,000 per month for women heads of families, the largest in terms of expenditure 16,964 crores. Gruha Jyoti, A Free Power Plan, Cost 8,900 crores, while Anna Bhagya, who supplies free rice, is responsible for 7,344.68 crores. Shakti Yojana, providing free travel for women, necessary 3,200 crores, and the cost of the young nivashi scholarship scheme 88.88 crores.
The analysis of the auditor added the implementation of these guarantee to a sharp increase in expenditure. The overall expenditure of the state increased by 12.54 % as compared to the previous year, while the revenue growth was only 1.86 %. This mismatch pushed the state back into revenue deficit 9,271 crores, despite recovering from the economic recession of Kovid-era in 2022-23.
“Increased expenditure from the implementation of schemes increased (12.54 %from last year) which was the contribution of revenue deficit factor 9,271 crores. As a result, the state’s fiscal deficit also increased 46,623 crore in 2022-23 65,522 crore in 2023-24, ”the report states.
To manage the deficiency, the state government trusted a lot of borrowings. Pure market loan increased 63,000 crores in 2023-24, which was 37,000 crores more than last year. The CAG warned that such an increase in the loan would “put a large -scale repayment burden in the near future” and increase the financial stress of the state.
One of the most striking findings was the impact of guarantee on capital expenditure. Auditor said that the available funds for infrastructure collapsed 5,229 crore compared to last year. As a result, incomplete projects increased by 68%, a result described as harmful to Karnataka’s development possibilities. “This compression in gross capital formation can prove to be harmful to the possibilities of future development,” it said.
The long -term projections mentioned in the report also painted a worrying picture. Under the medium-term fiscal plan for 2024-28, Karnataka is expected to have revenue deficit 27,354 crore, it is likely to climb with overall borrowings 1.05 lakh crores. The auditor warned that the state’s resources will continue to come under pressure until the government rationes its subsidy and welfare commitments.
At the same time, the Finance Department defended the decision to implement the guarantee. During the Exit Conference held in January 2025, the authorities acknowledged fiscal stress, but argued that the schemes “promoted local economy, reduced economic inequalities and supported human capital development.”
The report has triggered a political storm, in which the opposition has captured the conclusions to attack the Congress -led government. Leader of opposition R Ashok said that the CAG assessment confirmed Karnataka’s “financial decline” under Chief Minister Siddaramaiah.
“The Government of Karnataka is renunciation of the future of Karnataka for short -term political gains. If this system continues, Karnataka will be caught in irreplaceable debt and economic bankruptcy, with guaranteed stagnation,” Ashok commented.
He exposed the jump in fiscal deficit as evidence of mismanagement. “Fiscal deficit, which stood 46,623 crore has increased in 2022-23 65,522 crore in 2023-24. This increasing lack is proof that Karnataka is extending towards bankruptcy.
Ashok further stated that the lack of infrastructure expenses has already slowed down development. He said, “Today’s guarantee plans are guaranteed for future darkness, the CAG has warned,” he said.
He also criticized Siddaramaiah’s reputation as a “economic expert”, saying that the Chief Minister’s policies are harming the state’s long -term possibilities. “This is the working style of self-declared economist Siddaramaiah-Remember the so-called ‘Karnataka model’ of the government. Remember, history does not record how many budgets someone has presented, but how much those budgets contributed to the development and long-term development of the state,” said Ashok.
