Karnataka government reels under economic crunch owing to freebies: CM Siddaramaiah's economic advisor
July 19, 2025
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Home Bharat

Karnataka government reels under economic crunch owing to freebies: CM Siddaramaiah’s economic advisor

Karnataks government's decision to reallocate funds from various sources to support the guarantee schemes has sparked a contentious debate about the balance between welfare initiatives and development projects

by Indresh
Jul 11, 2024, 08:30 pm IST
in Bharat, Karnataka
Congress MLA Basavaraj Rayareddy, Economic Advisor of Karnataka CM Siddaramaiah

Congress MLA Basavaraj Rayareddy, Economic Advisor of Karnataka CM Siddaramaiah

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KOPPALA: The Siddaramaiah government has undertaken an exercise to allocate funds for five guarantee schemes, pulling from various sources to arrange and secure the necessary finances. This move has prompted criticism from the opposition BJP, which claims that development work in the state has stalled. These accusations seem to have gained credibility, as senior Congress MLA Basavaraj Rayareddy himself acknowledged the issue.

Speaking in Mangaluru village of Yalaburga taluk in Koppal district,  on Thursday, July 11 Rayareddy stated that most of the grants in Karnataka have been allocated to guarantee schemes. He revealed that the state needs to allocate sixty to sixty-five thousand crores annually for these schemes, leaving little to no funds for development projects. “Many are seeking funds for development in various areas, but there simply isn’t any money available,” Rayareddy said. He noted that as the Chief Minister’s financial adviser, he was able to secure grants for development works, but others are not as fortunate.

This admission by Rayareddy lends weight to the opposition’s claims that the state’s development work has come to a standstill. Leaders from the opposition JDS and BJP have been vocal in their criticism of the government’s guarantee schemes, arguing that the state’s coffers are being depleted by providing free benefits to the public. They also contend that funds earmarked for various departmental development projects are being diverted to these guarantee schemes, resulting in no significant development work being carried out. Opposition leaders have pointed out that no new projects have been initiated, and no foundation stones have been laid in the past year, highlighting a lack of progress.

The issue has been further compounded by reports that the Karnataka government has decided to utilize funds allocated under the Karnataka Scheduled Castes Sub-Plan (SCSP) and Tribes Sub-Plan (TSP) to implement the five guarantee schemes. The government plans to use Rs 14,730.53 crore from the SCSP and TSP allocations for these schemes. This has prompted the National Commission for Scheduled Tribes to issue a notice to the state government, requesting details about the use of SCSP and TSP funds for the guarantee schemes.

In response, opposition parties like the JDS and BJP have erupted in protest, arguing that using SC and ST grants for guarantee projects is inappropriate. They are gearing up for a major protest on July 15, calling for a demonstration at Freedom Park in Bengaluru and later planning to lay siege to the Vidhana Soudha. The controversy continues to escalate as the government and opposition grapple over the allocation of funds and the impact on the state’s development.

Topics: CM Siddaramaiah
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