K'taka Cong faces challenge of development works getting stalled at the cost of freebies

Bengaluru, June 2 (IANS) Karnataka Congress government which is all set to announce five guarantee schemes promised during elections is facing paucity of funds for the development activities in the state.

The experts have warned that due to the pressure on the economy by the freebies, the state might lose its edge over other states in terms of competitiveness.

The freebies also threaten to challenge the fiscal and economic discipline of the state which is intact almost during the rule of all governments in the state. Karnataka imposes the highest stamp duty already on land compared to neighbouring states, say experts.

Minister for Law and Parliamentary Affairs H.K. Patil on Friday stated that the state government would be burdened by the implementation of five guarantee schemes. However, he maintained that the poor class will benefit from the schemes.

The five guarantees, 10 kilograms of free rice to every individual of BPL family under Anna Bhagya scheme; Rs 2,000 per month allowance for woman head of family under Gruha Laxmi scheme; Rs 3,000 allowance for unemployed graduates and Rs 1,500 for unemployed diploma holders for two years under Yuva Nidhi scheme; free bus travel for women; 200 units of free electricity under Gruha Jyothi scheme are going to cost Rs 55,000 crore to Rs 60,000 crores with conditions. They are going to cost Rs 1.03 lakh crore if given without conditions, say sources in the Finance department.

The Karnataka state budget outlay is Rs 3.09 crores. If the government wants to implement freebies with conditions it's going to cost one third of the budget cost.
The sources in the Finance department explain that it is impossible in the present circumstances to fulfil the obligations with going for loans. The state has Rs 5.64 lakh crore as loans.

Further, the state government can't hike the GST tax as it will have to be done through the GST Council and it will take time. The sources explain that the Congress government is planning to mobilize revenues through the real estate sector, advertisement policy, rising the land guidance value, stamp duty. Chief Minister Siddaramaiah is working out in a way that no further tax is imposed on taxpayers.

There are 1.31 crore BPL card beneficiaries in the state and 32.40 lakh APL card holders. 57 lakh women are beneficiaries of social security schemes such as widow pension and others already. The families having an annual income of less thanARs. 17,000 in urban areas and less thanARs. 12,000Ain rural areas will be considered below the poverty line.

Former Chief Minister Basavaraj Bommai has written a letter to the Chief Minister Siddaramaiah and asked him not to cut down on other pro-people schemes implemented earlier at the cost of freebies. "It is the duty of the responsible government to continue all the development projects of all the departments in view of the development of the state. The government should commit to the expenditures and give a public statement in this regard," he mentioned.

Aam Aadmi Party (AAP) Karnataka President Prithvi Reddy had written a letter to Siddaramaiah and Deputy Chief Minister D. K. Shivakumar, inviting them to visit AAP-ruled Delhi and conduct a study regarding the implementation of guarantees.

In separate letters written on Saturday congratulating the CM and DCM, Prithvi Reddy said, "When the Aam Aadmi Party introduced revolutionary changes in the areas of electricity, water, youth welfare, women empowerment schemes, and revolutionised education, health, we were asked, "How can they be tackled?".

Today, it is a matter of pride that the AAP model of governance has not only been successfully implemented in Delhi and Punjab, but other states and political parties are emulating it," he said.

"Aam Aadmi Party's welfare schemes like free electricity, free bus travel, financial assistance to women and youth unemployment benefits were promised by the Congress party. We are ready to share our experiences and knowledge in successfully implementing these projects for the benefit of the people of our state," he explained.

Siddaramaiah earlier maintained that implementation of all schemes would cost Rs 50,000 crores a year. The budget size of Karnataka is Rs 3.1 lakh crore and mobilizing the funds is not going to be a difficult task, he maintained. "I have presented seven budgets in the assembly. I am very much aware of finances," he said.

"When we are spending Rs 56,000 crore as interest every year, can't we spend Rs 50,000 crore on our people," he wondered.