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Union ministers from Karnataka slam Siddaramaiah govt over 'poor' fiscal management

Union Ministers, BJP and JD(S) MPs from Karnataka have alleged that the state’s fiscal situation has been deteriorating due to mismanagement.
Last Updated : 30 June 2024, 02:16 IST

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Bengaluru: Slamming the Congress government’s handling of state finances, the Union Ministers, BJP and JD(S) MPs from Karnataka have alleged that the state’s fiscal situation has been deteriorating due to mismanagement.

In a joint memorandum submitted to Chief Minister Siddaramaiah, these leaders said that the citizens of the state have been grappling with the adverse effects of high inflation and escalating prices in the past year, because of the missteps by the state government. The memorandum was submitted to the CM, at a meeting with MPs from the state to discuss projects pending with the Centre. 

The letter was signed by Union Steel Minister H D Kumaraswamy, Food and Consumer Affairs Minister Pralhad Joshi, Minister of State for Railways V Somanna and Labour Minister Shobha Karandlaje and all BJP and JD(S) MPs, including Jagadish Shettar and Basavaraj Bommai.

“Between June 2023 and May 2024, Karnataka’s inflation was 6.1% against the national average 5.4 % during the same period. By contrast, from June 2022 to May 2023, the period ruled by the BJP, the state witnessed 5.39% inflation compared to national average of 6%,” the memorandum said.

“The fiscal deficit of FY 24-25 in Karnataka has increased by nearly 78% as compared to FY 22-23. Karnataka had prided itself for being a revenue-surplus state and now it has become become a revenue-deficit state. The fact that the revenue deficit of the state has doubled in the last one year is a clear indication of the fiscal governance,” the leaders said.

The state government cut allocation for capital expenditure in the budget for 2024-25, even as the overall spending expanded by 16.8%, the letter said.

The government has steeply increased borrowings in budget 2024-25, which will result in increased debt burden on citizens and businesses. The open market loans have shot up by over 25% - from Rs 77,063 crore in 2023-24 to Rs 96,840 crore in budget presented for 2024-25, and borrowings crossed 1 lakh crore, perhaps for the first time in a year,” the letter said.

Dismissing the allegation, Siddaramaiah said that the state’s financial condition was good and fiscal deficit was under total control.

The revenue deficit increased from Rs 13,496 crore in 2022-23 to Rs 27,354 in 2024-25, as the state implemented guarantee schemes. However, efforts would be made for extra revenue mobilisation, he said. 

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Published 30 June 2024, 02:16 IST

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