BENGALURU: The Karnataka BJP on September 23 staged a protest near the Kengal Hanumanthaiah statue at Vidhana Soudha, accusing the Congress government of mishandling the state’s finances and demanding greater accountability over its spending commitments.
BJP state president B.Y. Vijayendra, Leader of Opposition in the Assembly R. Ashoka, Leader of Opposition in the Legislative Council Chalavadi Narayanaswamy, former ministers and several MLAs and MLCs took part in the demonstration. Protesters carried empty vessels and coconut shells and raised slogans alleging that the state government had pushed Karnataka into a financial crisis.
The protest followed a recent Finance Department note cautioning the government against taking up major new expenditure commitments without identifying assured sources of funding. The department flagged limited fiscal space and called for a realistic, prudent approach to new projects.
The September 17 note said Karnataka’s projected fiscal deficit for 2026-27 was 2.95 per cent of GSDP, close to the 3 per cent limit under the Fiscal Responsibility and Budget Management framework. It also estimated the revenue deficit at Rs 22,957 crore and cumulative liabilities at 24.94 per cent of GSDP.
The department further pointed out that the balance cost of ongoing works exceeded Rs 2 lakh crore. In contrast, pending bills in four major departments Public Works, Water Resources, Minor Irrigation and Rural Development and Panchayat Raj stood at Rs 36,136 crore.
The BJP used these figures to attack the government and demanded that Chief Minister D.K. Shivakumar issue a white paper on the state’s financial position.
Addressing the protest, Ashoka alleged that the government had lost control of the Finance Department and kept announcing large projects without ensuring funds. He demanded Shivakumar’s resignation, claiming that the Chief Minister was not in a position to manage the state’s finances.
Ashoka also referred to several announcements made during the Chief Minister’s visits to different regions. He alleged that projects involving thousands of crores had been announced in places including coastal Karnataka, Kalaburagi, Chamarajanagar and Bagalkot, despite the Finance Department raising concerns over available funds.
The Opposition Leader alleged that the government was struggling to meet expenditure on drought relief, pensions, salaries and other commitments. These claims were made during the protest and were not independently established by the Finance Department note.
Vijayendra also demanded a white paper, alleging that Karnataka had accumulated more than Rs 8 lakh crore in total debt and that the present government had raised more than Rs 4 lakh crore through fresh borrowing. He alleged that the state was taking on additional liabilities while announcing projects worth thousands of crores.
The BJP state president cited the Finance Department’s warning as evidence of what he described as a serious mismatch between government announcements and available resources. He alleged that the government was making commitments without first identifying funding sources.
The Finance Department’s note, however, does not describe Karnataka as bankrupt. It cautions against major new commitments because of existing liabilities, pending bills and limited fiscal space. The department specifically noted that more than Rs 5,000 crore worth of projects had already been approved during the first six months of 2026-27, while funding for some new commitments had not been identified beyond projected revenues.
Chief Minister Shivakumar, who also holds the Finance portfolio, has acknowledged the Finance Department’s caution and said there was nothing wrong with officials advising the government on fiscal management. He said the government would manage its finances appropriately.
The Finance Department has also flagged additional financial pressures arising from drought conditions and demands from several departments, including Water Resources, Energy, Commerce and Industries, Urban Development and Transport.
