The Union finance minister said since the state was spending its resources for welfare schemes, there was no spending on capital expenditure.
Published Jul 28, 2024 | 3:05 PM ⚊ Updated Jul 28, 2024 | 3:05 PM
Union Finance Minister Nirmala Sitharaman. (X/Nirmala Sitharaman)
Union Finance Minister Nirmala Sitharaman on Sunday, 28 July, took a dig at the Siddaramaiah-led Karnataka government over the financial management in the state.
“The state’s contribution is high inflation. It is much higher than the national average. The national average of inflation between June 2023 and June 2024 was 5.4 percent, whereas in Karnataka it was 6.1 percent.”
“Between June 2022 and May 2023, Karnataka’s inflation was lower than the national average. The national average was 6 percent but Karnataka kept its inflation rate at 5.39 percent. There was a year, not too far away, the state inflation was lower than the national average,” the Union minister claimed.
She also blamed the Karnataka government for spreading misinformation on central transfers and grants to the state.
Pointing out the reasons for the inflation in Karnataka, Sitharaman said: “The Karnataka government hiked Petrol and diesel prices by ₹3, milk prices have gone up by ₹5, property guidance value was hiked from 25 percent to 30 percent, stamp duty charges increased from 200 percent to 500 percent, vehicle registration fees hiked and imposed additional 10 percent lifetime tax on EV vehicle.”
Sitharaman said the revenue deficit is very high in Karnataka.
“Capital expenditure spending is not happening or has reduced. With all the spending on the promised welfare and the five packages (poll guarantees), (Karnataka government) cannot spend on capital expenditure,” she claimed.
“If you do not spend on capital expenditure, employment opportunities are not going to come to Karnataka. You won’t have your youth getting employed. Unless capital expenditure is spent, your demand and consumption will not increase and employment will not happen,” the Union minister said.
“Open market borrowings have increased and touched over ₹1 lakh crore. Borrowings after borrowings are made to fulfil promises. Karnataka was revenue surplus two years ago but now it’s deficit,” charged the Union Minister.
“Industries are leaving and I do not want to take names of those companies. As law and order is worsening, industries are more scared to be here and want to get out,” she claimed.
“SC/ST funds are being siphoned off and blame is put on everybody else. With this administration in Karnataka, the healthy state which had a revenue surplus and used to spend on capital expenditure, drew investments. Today it is frightening investments out of the state,” Sitharaman further claimed.
She claimed that central transfers to Karnataka have increased substantially but the state government was spreading misinformation telling people that the Union government was not giving the state its due.
“It is completely false. The Karnataka government has been doing wrong publicity. Even people of Karnataka are not getting factual information,” Sitharaman said.
She claimed that the state received more central funds in the last ten years compared to what was allocated during the UPA tenure.
Highlighting the transfer of central funds to Karnataka, Sitharaman pointed out: “Between 2004-2014, when UPA government was at the helm in Delhi, Karnataka received only ₹18,791 crore. Between 2014-24, under PM Modi’s regime, the state received ₹2,95,818 crore,” she said.
“Karnataka received ₹67,779 crore as grant-in-aid from the Government of India during the UPA regime in 10 years. Under PM Modi’s regime, ₹2,36,955 crore was received between 2014 to 2024,” Sitharaman said.
“With regard to the tax devolution for the fiscal year 2024-25 in the budget, the state has been given ₹45,485 crore. If I have to compare, under UPA, it was ₹8,179 crore per annum. This year alone, ₹45,585 crore was allocated,” she added.
“Likewise, it was only ₹6,077 crore per annum as grant-in-aid to the state during the UPA regime. This year alone, we are giving ₹15,300 crore (to Karnataka),” stated the Union finance minister.
(Edited by Muhammed Fazil)
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