Financial Strain on Karnataka's Governance: A CAG Report Warning

The Karnataka government's fiscal policies come under scrutiny as the Comptroller & Auditor General (CAG) highlights financial stress in its latest report. Increased subsidies and expenditures on five major guarantee schemes have compelled the state to slash funds for key projects.

During the fiscal year 2024-25, the Karnataka Congress government allocated Rs 52,525 crore to schemes like 'Shakti' and 'Gruha Lakshmi', constituting a significant 20% of revenue receipts. Despite a stable revenue growth of 10.63%, expenditures surged by 14.99%, primarily due to these schemes, according to the CAG.

This imbalance has resulted in a revenue deficit of Rs 20,834 crore and calls for increased borrowing, now totaling Rs 71,525.15 crore. The CAG warns that such borrowing jeopardizes Karnataka's fiscal targets and could hinder critical infrastructure investments essential for future development.