Karnataka Government exchequer's status

Karnataka Government exchequer's status

The Karnataka government exchequer is currently under significant financial strain mainly due to the implementation of extensive welfare schemes known as the five guarantee schemes. These schemes alone have cost the state exchequer around Rs 95,450 crore since their inception, with Rs 52,526 crore spent in the 2024-25 fiscal year and continuing expenditures in 2025 [4].

This large allocation towards welfare has contributed to a revenue shortfall estimated at Rs 12,000 crore despite robust revenue collection. The government is facing mounting debt pressure and is considering measures such as reducing borrowings and rationalizing some of the subsidy schemes to manage the fiscal deficit [2]. Efforts are also underway to generate alternative and more reliable sources of income, including leveraging surplus funds from state-run corporations to support financially troubled entities [2].

Chief Minister Siddaramaiah has acknowledged the burden on the state's finances but affirmed the government's commitment to continue these welfare initiatives without stopping development work, emphasizing that expenditures are being managed despite pressures [1][7]. However, Karnataka is also facing challenges at the national level, receiving disproportionately lesser tax shares and grants relative to its contributions to the national exchequer, which is considered a "raw deal" by critics and state leaders [5][3].

In summary, Karnataka's exchequer is pressured by the heavy spending on welfare guarantees and subsidies, leading to a notable revenue shortfall and debt concerns, but the government remains committed to its social welfare policies while seeking new fiscal strategies to balance development and financial health [1][2][4][5][7].

Citations:
[1] Siddaramaiah admits burden on Karnataka exchequer due ... https://www.indiatoday.in/india/karnataka/story/siddaramaiah-guarantees-burden-state-exchequer-poll-sops-row-mallikarjun-kharge-2631673-2024-11-11
[2] Karnataka Faces Rs 12000 Cr Revenue Shortfall https://timesofindia.indiatimes.com/city/bengaluru/karnataka-faces-rs-12000-cr-revenue-shortfall-major-changes-ahead-for-welfare-schemes/articleshow/114785855.cms
[3] Mohandas Pai says Karnataka got 'raw deal' from 14th & ... https://www.newindianexpress.com/cities/bengaluru/2025/Oct/17/mohandas-pai-says-karnataka-got-raw-deal-from-14th-15th-finance-commissions-stresses-their-autonomy
[4] Karnataka Government Allocates Rs 95450 Crore for Five ... https://www.deccanherald.com/india/karnataka/karnataka-govt-spends-rs-95000-cr-on-five-guarantee-schemes-so-far-3704652
[5] Siddaramaiah on X https://x.com/siddaramaiah/status/1845067244046524877?lang=en
[6] After rolling out five guarantee schemes that cost the state ... https://www.instagram.com/p/DNme6bRh2FR/
[7] The five 'guarantee' schemes in #Karnataka have “neither ... https://www.facebook.com/deccanherald/posts/the-five-guarantee-schemes-in-karnataka-have-neither-burdened-the-exchequer-nor-/1314764520691942/
[8] budget 2025-26 https://finance.karnataka.gov.in/uploads/media_to_upload1741332694.pdf
[9] Karnataka Minister Zameer Ahmed On Govt's Rs 60000 ... https://www.youtube.com/watch?v=v0CcDPz7Wso