Bills balloon as salaries, debts set to hog Karnataka budget outlay

Bengaluru: Nearly four-fifths of the money Chief Minister Siddaramaiah has earmarked for 2025-26 will go towards committed expenditure like salaries, subsidies and debt repayment, exerting immense pressure on the government to cut costs so as to enable more productive expenditure.

In 2025-26, the total expenditure is pegged at Rs 4.09 lakh crore, of which the government will need Rs 3.21 lakh crore, or 78 per cent, just to fulfil its committed expenditure, budget books show.

Such is the rise in these bills that they make up for 103 per cent of revenue expenditure (costs involved in the government’s day-to-day functioning).

In 2025-26, the government will set aside Rs 71,336 crore for capital expenditure, a 27 per cent rise. But that may not be enough to come out of the woods.

As Leader of the Opposition, Siddaramaiah was the flagbearer for administrative weight loss as he kept pulling up the then BJP government to cut unnecessary costs.

“Nothing can be done in the present situation to bring down committed expenditure,” Chief Minister’s Economic Advisor Basavaraj Rayareddi, who was involved in the budget-making process, told DH.

“Committed expenditure is definitely very high because salaries were revised as per the 7th Pay Commission’s recommendations. The remaining elements under committed expenditure can’t be rolled back,” Rayareddi said. “We have to push through somehow. Yet, we have ensured some development that takes place.”

Last year’s salary revision alone created an additional burden of Rs 19,401 crore on the exchequer.

While higher committed expenditure means little room to take up developmental works, another casualty is government recruitment.

“There are huge vacancies. Filling them up will be a financial burden. Keeping posts vacant is also a problem,” Karnataka Administrative Reforms Commission chairperson R V Deshpande, the senior-most Congress lawmaker, said. “Cutting costs requires hard decisions that won’t be liked.”

Rayareddi concurred and said, “Administrative reforms won’t happen soon. Posts need to be cut for that.”

Some decisions -- cutting or rationalising subsidies, for example -- need political will. In 2025-26, the government will spend Rs 79,925 crore on subsidies, up 27 per cent since 2023-24. The biggest subsidy component is free power for irrigation pumpsets. The finance department has been asking the government to consider stricter limits on rich farmers.

“We have been doing internal exercises on subsidies,” CM’s Additional Chief Secretary L K Atheeq said. “What we are also trying to do is to see that our revenues grow at 11-12 per cent while keeping committed expenditure at a rate of 6-7 per cent,” he said, conceding that administrative expenses need rationalising.