Budget: Siddaramaiah likely to junk BJP's sectoral funding approach

Karnataka Chief Minister Siddaramaiah is likely to ditch the BJP’s model of making sectoral allocations in the July 7 budget, which will be his record 14th.

It is likely that Siddaramaiah’s budget will have department-wise allocations, which was standard practice until the B S Yediyurappa-led BJP government introduced the sectoral approach from the 2020-21 financial year.

Yediyurappa’s successor Basavaraj Bommai continued the same approach by earmarking funds for sectors.

As Leader of the Opposition then, Siddaramaiah had criticised sectoral allocations. He had said that making sectoral allocations “lacked transparency”.

Also Read | 'Budget size to go up to Rs 3.35 lakh crore,' says Siddaramaiah

The BJP government budgets since 2020-21 divided expenditure across six sectors: agriculture & allied activities; welfare & inclusive growth; stimulating economic growth; Bengaluru development; culture, heritage & natural resources and administrative reforms & public service delivery.

In the 2023-24 budget presented by Bommai, the welfare & inclusive growth sector had the highest allocation of Rs 80,318 crore followed by administrative reforms (Rs 68,585 crore), stimulating economic growth (Rs 61,488 crore), agriculture & allied activities (Rs 39,031 crore), Bengaluru development (Rs 9,698 crore) and culture (Rs 3,458 crore).

This approach started with the 2020-21 budget when the Covid-19 pandemic was just beginning its havoc. Apparently, sector-wise allocations were meant to ensure better channelisation of funds. However, it is said that this helped the government keep out-of-sight cuts made to departmental funds in the wake of the pandemic.

Reverting to department-wise allocations will give Siddaramaiah clarity in explaining to citizens how he plans to raise resources to fund the Congress’ five guarantees that are expected to cost Rs 40,000 crore in the remaining nine months of this fiscal. They are projected to cost Rs 50,000-60,000 crore annually.

Siddaramaiah has revealed that the size of his July 7 budget will be Rs 3.35 lakh crore, up from Rs 3.09 lakh crore that Bommai presented.

Bommai wanted to borrow Rs 77,750 crore this fiscal while estimating Karnataka’s total outstanding debt at 24.2% of the GSDP, dangerously close to the 25% limit under the law. Siddaramaiah could increase borrowings to Rs 85,000 crore, according to sources in the finance department.

The finance department has already indicated that it would be “imperative” to stop ongoing schemes. One of them could be the state’s share in financial assistance to farmers under PM-KISAN.

Siddaramaiah’s July 7 budget will replace the one Bommai presented in February, which is valid till July 31.