Earlier this week, BJP State President BY Vijayendra and former Chief Minister Basavaraj Bommai had alleged that the Congress-led government had mismanaged state finances and demanded a white paper ahead of the March 7 budget presentation.
Published Feb 21, 2025 | 11:28 PM ⚊ Updated Feb 21, 2025 | 11:28 PM
Synopsis: Karnataka Chief Minister Siddaramaiah has defended the state’s financial health amidst BJP leaders’ allegations of rising debt and mismanagement. In response, he accused the previous BJP government of reckless spending and financial mismanagement while criticising the state BJP leadership for failing to defend Karnataka’s interests at the Centre. He asserted that his government is fulfilling its commitments without compromising economic stability.
With the Karnataka state budget looming, the state’s financial health has become a focal point in a war of words between the ruling Congress and Opposition Bharatiya Janata Party (BJP).
Chief Minister Siddaramaiah, on Friday, 21 February, issued a press statement rebutting allegations that the state is heading towards financial bankruptcy under his stewardship, responding to BJP demands for financial transparency before the budget.
Earlier this week, BJP State President BY Vijayendra and former Chief Minister Basavaraj Bommai had alleged that the Congress-led government had mismanaged finances, increased service charges, and failed to pay government salaries on time, demanding a white paper ahead of the March 7 budget presentation.
BJP leaders are making baseless claims about Karnataka’s economy, ignoring the fact that their misgovernance caused financial distress.
When in power, they approved projects worth ₹2.7 lakh crore without allocating funds, including ₹1.66 lakh crore under the CM’s discretionary…
— Siddaramaiah (@siddaramaiah) February 21, 2025
Siddaramaiah’s statement instead accused the previous BJP administration of financial mismanagement and reckless spending that left his administration burdened with unpaid bills and unfulfilled commitments.
He maintained that the state’s fiscal health remains strong with improving revenue growth and investment.
“Despite the BJP’s conspiracies and betrayals, Karnataka continues to stand strong. We are fulfilling our promises and fighting for our state’s rights,” the chief minister declared, urging the opposition to engage constructively rather than spread misinformation.
Vijayendra and Bommai, speaking to media persons on separate occasions, had alleged that the Congress government was pushing Karnataka towards “financial bankruptcy.”
“The financial condition is deteriorating day by day. This is evident from the fact that the government is struggling to pay the salaries of its staff, and the guarantee schemes have stopped reaching beneficiaries in the last four to six months,” he said, the Hindu reported.
He also pointed to rising service charges as a sign of mismanagement. “Property registration charges have gone up by 600 percent, the property guidance value has increased by 30 percent, vehicle registration fees have gone up by 10 percent, and service charges in government hospitals have increased by 5 percent,” he claimed.
Guaranteed Gifts of this “#100PercentPriceHikeSarkaara” of @inckarnataka has been the rises in
▶️Stamp Duty
▶️Excise Duty
▶️Fuel Prices
▶️Milk Price
▶️Bus fares
▶️Metro fares
▶️Water Bill
▶️Electricity BillAs govt is mulling to rise the Milk Prices again, it is proved beyond…
— Vijayendra Yediyurappa (@BYVijayendra) February 19, 2025
Vijayendra further alleged that Karnataka’s loan burden had risen by ₹1.90 lakh crore in just two years under Congress rule and that the state government was considering yet another hike in milk prices and electricity tariffs.
Meanwhile, Bommai warned that if the chief minister did not release a white paper on state finances, the BJP would issue a ‘black paper’ exposing the government’s failures.
He also questioned whether Karnataka’s budget allocations were being fully utilised, stating that there had been “no discussion on how much money has been spent on backward class welfare this year.”
Chief Minister Siddaramaiah dismissed the BJP leaders’ allegations as politically motivated, asserting that the previous government’s financial mismanagement was to blame for the current challenges.
“During the BJP’s rule, they took up projects worth seven times more than the allocated budget. As of 31 March 2023, they left behind unpaid bills worth ₹2.70 lakh crore in key departments like public works, minor irrigation, water resources, urban development, rural development, and housing,” he stated.
He accused the BJP of approving projects worth ₹1.66 lakh crore under the Chief Minister’s discretionary fund without proper financial planning, calling it “a prime example of reckless governance.”
Siddaramaiah also attacked state BJP leaders for failing to defend Karnataka’s financial interests at the Centre.
“Despite the BJP-led central government under Narendra Modi exploiting Karnataka’s resources, the state BJP leaders remained silent. The central government stopped compensating the state for GST losses, causing an annual revenue loss of ₹18,000 – ₹20,000 crore,” he stated.
“The Modi government has also done great injustice to Karnataka in tax devolution – Karnataka is expected to receive only ₹51,000 crore, but compared to 2018, we should have received at least ₹73,000 crore. This alone causes an annual loss of ₹22,000 crore to the state,” he stated.
Dismissing the BJP’s claims of financial instability, Siddaramaiah said Karnataka had robust economic indicators.
“Our average budget growth over the last two years is 18.3 percent, compared to just 5 percent during the BJP’s four-year rule. The state’s own tax revenue growth is 15 percent, compared to 11 percent during the BJP’s tenure,” he noted.
He assured that Karnataka’s fiscal discipline remains intact. “Our fiscal deficit is below 3 percent, and our total liabilities are within 25 percent of the Gross State Domestic Product (GSDP). Our capital expenditure is also better than progressive states like Maharashtra (12.74 percent), Tamil Nadu (10.58 percent), and Telangana (11.58 percent),” he said.
Siddaramaiah also highlighted that Karnataka’s “strong economy and good governance have attracted investments worth ₹10.27 lakh crore at the recent Invest Karnataka event,” demonstrating investor confidence in the state’s financial health.
The BJP has repeatedly criticised Congress’s guarantee schemes, arguing that they are draining state resources and forcing service charge hikes.
“The Chief Minister is under an illusion that people are happy with the guarantee schemes,” Vijayendra had earlier alleged. “In reality, people are paying the price through increased charges on essential services.”
Siddaramaiah rejected this argument, stating that the government is fulfilling its commitments without compromising financial stability.
“We are providing over ₹90,000 crore annually directly to the people through Direct Benefit Transfers (DBT) and subsidies. This includes ₹10,400 crore for senior citizens, disabled persons, widows, and others. The central government contributes only ₹450 crore, the same as during Manmohan Singh’s tenure. What has the BJP done for Karnataka?” he questioned.
He also defended the 27.5 percent salary hike for government employees under the Seventh Pay Commission, which will cost an additional ₹16,000 crore this year. “Unlike the BJP, we prioritise our workforce and ensure timely payments,” he added.
Siddaramaiah countered the BJP’s debt-related allegations by pointing towards the Modi government’s rising borrowings.
“Vijayendra, who speaks about debt, should know that the central government’s debt has skyrocketed under Modi. From ₹53.11 lakh crore in 2013–14, it is expected to reach ₹200.16 lakh crore by March 2026, as announced by Nirmala Sitharaman. This is an increase of over ₹147 lakh crore in 11 years,” he pointed out.
He also highlighted how state finances across India have been destabilised. “In March 2014, all states’ combined debt was ₹25 lakh crore. Now, it has exceeded ₹95 lakh crore – an increase of ₹70 lakh crore in just 10 years. This is due to the Centre’s economic policies, not just Karnataka’s situation,” he argued.
(Edited by Dese Gowda with inputs from Nolan Patrick Pinto)
