Karnataka CM Siddaramaiah, deputy CM DK Shivakumar

BENGALURU: Comptroller and Auditor General (CAG) of India has cautioned that the five guarantee schemes launched by the Siddaramaiah-led Congress govt are exerting considerable strain on Karnataka’s finances, wiping out the fiscal recovery achieved after the Covid-19 years and eating into capital spending.In its report on state finances for 2023-24, CAG observed: “Implementation of the five guarantee schemes without rationalising existing subsidies/financial assistance or the benefits would place pressure on the state’s resources and have an influence on fiscal deficits and debt levels…”The report reviewed the schemes – Gruha Lakshmi, Gruha Jyothi, Anna Bhagya, Shakthi and Yuva Nidhi – and found they made up nearly 15% of the state’s revenue expenditure in 2023-24. During the year, the state’s revenue rose by only 1.8%, while expenditure surged by 12.5%, a rise primarily driven by the guarantees. CAG said this imbalance contributed to a revenue deficit of Rs 9,271 crore. Karnataka’s fiscal deficit also widened sharply, from Rs 46,623 crore in 2022-23 to Rs 65,522 crore in 2023-24.