**Karnataka’s Guarantee Schemes Strain State Finances, CAG Reports**
The Comptroller and Auditor General (CAG) has raised concerns regarding the financial implications of Karnataka’s five guarantee schemes, which constituted 15% of the state’s revenue expenditure for the fiscal year 2023-24. This report was presented in the Assembly on Tuesday.
Following its election victory in May 2023, the Congress government introduced several initiatives: Gruha Jyothi, Gruha Lakshmi, Anna Bhagya, Yuva Nidhi, and Shakti. The total expenditure for these schemes reached an impressive Rs 16,964 crore for Gruha Lakshmi, Rs 8,900 crore for Gruha Jyothi, Rs 7,384 crore for Anna Bhagya, Rs 3,200 crore for Shakti, and Rs 88 crore for Yuva Nidhi.
According to a statement from the Principal Accountant General (Audit-1), the implementation of these guarantees resulted in a 12.54% increase in expenditure compared to the previous year, leading to a revenue deficit of Rs 9,271 crore. Additionally, the fiscal deficit surged from Rs 46,623 crore in 2022-23 to Rs 65,522 crore in 2023-24. To finance these schemes and address the deficits, the state resorted to net market borrowings of nearly Rs 63,000 crore, significantly higher than the Rs 26,000 crore borrowed the previous year.
The CAG report also indicated that funding these guarantees has led to a reduction in capital expenditure on infrastructure by approximately Rs 5,229 crore compared to 2022-23. The CAG cautioned that implementing these five guarantee schemes without reassessing existing subsidies or financial assistance could exert pressure on the state’s resources, potentially affecting fiscal deficits and debt levels.
In summary, while the guarantee schemes aim to provide substantial support to various sectors, their financial sustainability raises critical questions about the long-term fiscal health of Karnataka.
**FAQ**
**What are Karnataka’s five guarantee schemes?**
Karnataka’s five guarantee schemes include Gruha Jyothi, Gruha Lakshmi, Anna Bhagya, Yuva Nidhi, and Shakti, aimed at providing financial assistance to various segments of the population.
