Karnataka Budget: Siddaramaiah shifts to infrastructure, welfare gear

Bengaluru: Chief Minister Siddaramaiah on Friday made a much-needed course correction with a Budget that spends on infrastructure, offers new welfare doles and arrests fiscal bleeding from the ‘guarantee’ schemes even as his government’s financial stress remains palpable.

In his record 16th Budget presentation, which lasted three and a half hours, Siddaramaiah laid out his plan to spend Rs 4.09 lakh crore in 2025-26, a fiscal that promises to kickstart infrastructure projects which have been back-burnered for two years due to the ‘guarantee’ schemes.

Apart from apportioning Rs 7,000 crore for creating infrastructure in Bengaluru, the state’s growth engine, the chief minister has tackled a political problem that has been breathing down his neck: persistent demands by MLAs for grants.

A new Chief Minister’s Infrastructure Development Programme (CMIDP) will be launched with Rs 8,000 crore for minor irrigation, roads and urban infrastructure in all Assembly constituencies. That works out to Rs 35.71 crore per MLA.

“Going beyond the guarantees, we have made a substantially higher allocation for capital expenditure in the Budget,” Siddaramaiah said. Capital expenditure will be Rs 71,336 crore, up 27%.

The flagship ‘guarantees’ get Rs 51,034 crore, lesser than the Rs 52,009 crore allotted last year, giving Siddaramaiah some wriggle room, which he used for educational and livelihood initiatives for SCs, STs, OBCs and minorities, the Congress’ core support base known politically as the Ahinda. These communities have received Rs 16,630.9 crore, which is 18% more than last year. This is in addition to the SC/Tribal sub-plan funds.

Among minorities, Muslims, numerically the largest minority in the state, will be the biggest beneficiaries, evoking an attack from the BJP, which dubbed the Budget as “Halal Budget”.

In line with his welfare push, the CM has hiked remunerations for the government’s frontline ASHA and Anganwadi workers.

“By prioritising key sectors such as infrastructure, irrigation and social welfare, we are laying the foundation for long-term prosperity,” he said. Siddaramaiah took “immense pride” in doing this “while keeping the fiscal deficit and total liabilities ratio within prudent fiscal norms and limits”.

Fiscal deficit is Rs 90,428 crore. At 2.95% of GSDP, it stands dangerously close to the 3% limit. Revenue deficit is Rs 19,262 crore.

While the government has set a tax collection target of Rs 2.08 lakh crore in the next fiscal, it is likely to fall short of its target of Rs 1.89 lakh crore for the current fiscal ending March 31.

Siddaramaiah has not spelt out a clear resource mobilisation plan, except for a few measures such as auctioning excise licences and Infrastructure Investment Trusts.

The government wants to borrow Rs 1.16 lakh crore in 2025-26. “No state can run without borrowing,” Siddaramaiah argued. “The Union government has liabilities of Rs 200 lakh crore.