Amid guarantee push, Karnataka government under pressure to keep projects afloat

Just three departments, including the D K Shivakumar-led Water Resources, require four times the money available for the Congress’ five guarantees this fiscal, for various ongoing and unstarted works, exerting huge fiscal pressure on the government.

The departments of Water Resources, Minor Irrigation and Public Works together, have ongoing and unstarted works worth Rs 1.40 lakh crore.

The lion’s share of this comes from the Water Resources department, where works worth Rs 1 lakh crore are either underway, or yet to commence.

The Congress government has earmarked Rs 35,410 crore for the five guarantees this fiscal. 

On July 31, the Finance department lifted restrictions on funding ongoing works, which came days after the Congress lawmakers mounted pressure on Chief Minister Siddaramaiah to provide grants. This will apply to Rs 1.12 lakh crore of ongoing works largely sanctioned when the BJP was in power. 

The government can go slow on the remaining works costing Rs 28,253 crore that have been approved, but not grounded, according to sources in the Finance department. Most of these works were tendered in six months preceding the May 10 Assembly election, sources said.

“If there is no contractual agreement involved, and if only administrative approvals have been given, the government need not fund them,” one official explained.

But the Congress government is also wary of political backlash if ongoing or unstarted works are stopped. “A BJP MLA may go to town saying the Congress government stopped works,” the official said.  

As a fallout of the July 31 lifting of the funding freeze, the Congress lawmakers have started approaching Siddaramaiah, seeking approval for fresh infrastructure works in their constituencies, contributing to the pressure already created from fiscal commitments of the past. Typically, MLAs seek approvals for small works costing up to Rs 50 crore. 

To make space for development works, thereby satiating the need for MLAs to keep getting grants, the Finance department may ask Siddaramaiah to cap the cash outgo on the guarantees to around Rs 40,000-45,000 crore, according to sources.

In his 2023-24 Budget, Siddaramaiah admitted that taking up new projects is a “major challenge” because of pending works.

“The huge balance cost of works left over by the previous government has posed a major challenge to our government in taking up new projects,” he said in the budget.