JOIN USWhile Karnataka is third in terms of economic growth in the country, the increasing disparity between the rich and the poor continues to remain a concern. This “enigma of two Karnatakas within Karnataka”, one with high per capita income and the other with high poverty, which was highlighted by 15th Finance Commission Chairman N K Singh some time ago, has once again found mention in the latest report of the Public Affairs Centre, a think-tank headed by former ISRO chief G Kasturirangan, which assesses adequacy and quality of governance. Among large states, Karnataka is second after Kerala in terms of growth but when it comes to equality, it ranks 12th, much behind other bigger states like Punjab, Gujarat and Rajasthan. In fact, apart from Telangana, Karnataka is the only state in the South to have a negative ranking on the parameter of equality. While growth is assessed in terms of gross state domestic product (GSDP), employment levels and infrastructure development like construction of schools, equality is measured in terms of access to services and the level of malnutrition and inequalities prevalent in the society. In effect, this means that though Karnataka represents an engine of India’s growth, contributing about 8% of the country’s GDP and boasts of a per capita income higher than the national average, the failure to ensure equitable distribution of resources has only widened the gap between the rich and the poor.
Typically, Karnataka politicians and bureaucrats have taken shelter under the “injustice” meted to the state in the devolution of funds by the 15th Finance Commission. Faced with continuous years of both drought and famine, Karnataka has always complained that the lack of adequate financial support from the Centre has drained its resources. The state also claims that the delay in release of GST compensation last year and the projected shortfall in the collections in 2020-21, has only aggravated the problem. But the real issue is not just the shortage of funds, but their inefficient deployment.
While the state has maintained financial discipline by containing fiscal deficit below the stipulated ceiling, the poor control over budgetary spending has always remained a stumbling block. According to the CAG report for the year ended 2019, nearly Rs 25,000 crore of budgetary allocation to various departments had remained unutilised in the previous fiscal. This apart, there is an apparent flaw in the manner in which resources are distributed in the state. Unless the government sets right this lacuna, the wedge between the haves and the have nots will only continue to widen, making Karnataka a rich state with poor people.