Facing revenue shortfall, Siddaramaiah plans steps to trim expenditure

With Karnataka facing a revenue shortfall at the halfway mark of the fiscal, Chief Minister Siddaramaiah on Friday directed officials to limit expenditure and see to it that the flagship guarantee schemes benefit only the “deserving”.

At a meeting with senior officials from the finance department, Siddaramaiah was told that the government had met 44 per cent of the annual revenue target against what should have been 48 per cent at the end of September.

In the 2024-25 fiscal, Karnataka is expecting to mop up own-tax revenues of Rs 1.89 lakh crore. This includes commercial taxes, excise, motor vehicles and stamps and registration.

According to sources, Karnataka has managed to collect Rs 87,000 crore so far.

“The CM has directed that in the next six months, we must speed up revenue collection to make up for the shortfall,” a government source said, adding that Siddaramaiah will review all revenue-earning departments by the end of this month.

The pressure of the five guarantee schemes, on which the government will spend Rs 52,000 crore this fiscal, has prompted Siddaramaiah to look for ways to shed fiscal weight.

“Rationalisation” of the guarantee schemes - Gruha Jyoti, Gruha Lakshmi, Anna Bhagya, Yuva Nidhi and Shakti - was discussed at the meeting, sources said.

Siddaramaiah, also the finance minister, directed officials to limit expenditure. One way of doing this, the CM is understood to have told officials, is to weed out ineligible ration (BPL) cards. These cards form the basis for two costliest guarantee schemes - Gruha Lakshmi and Anna Bhagya. “In this regard, further discussions are required,” the source quoted earlier said.

The state has 1.47 crore households comprising 4.67 crore people who have BPL cards. Admittedly, this is an inflated figure due to “bogus” beneficiaries.

The guarantee schemes contributed to the Congress’ big Assembly election victory last year. However, they did not give Congress expected political dividends in the Lok Sabha polls. As a result, voices emerged from within the party on the electoral utility of the schemes. For example, Public Works Minister Satish Jarkiholi has argued that the schemes must be reviewed to ensure only the poor get benefits.

Last year, when Congress came to power, the government spent Rs 36,857 crore on the guarantee schemes, which have an estimated 5.01 crore beneficiaries.