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K’taka CM’s economic advisor admits guarantees taking toll on state exchequer

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Bengaluru: Karnataka Chief Minister Siddaramaiah’s economic advisor stated that the implementation of five guarantees is taking a toll on the state exchequer.

“The five guarantees have become a huge financial burden for our government because as much as Rs 58,000 crore has been earmarked for them. We are looking into making some changes to these guarantee schemes.

“As an economic advisor, I am looking into the possibilities of getting funds from the state and center to fund guarantees. We are holding discussions in this regard,” Basavaraj Rayareddy, the CM’s economic advisor, told reporters on Tuesday.

Congress won the 2023 assembly election on the promise of providing a slew of freebies, including free electricity.

However, the ruling party has been finding it difficult to implement the guarantees, owing to the financial and economic feasibility of the freebies, which the parties ignore in their bid to assume power.

Another minister, Sharanabasappa Darshanapur, admitted in June that the guarantee schemes will take a toll on the infrastructure development in Karnataka. He stated that a financial burden of Rs 40,000 crore to Rs 50,000 crore would be on the state exchequer due to these guarantee schemes.

Soon after announcing the implementation of free electricity, the Congress government increased the power tariffs in the state to fund the poll promise.

The energy costs and power tariffs in Karnataka were hiked by Rs 2.89 per unit in June, leaving citizens to shell out an additional Rs 2.89 per unit if their power usage exceeds the 200 units slab while paying the power bill.

In July 2023, Karnataka Deputy CM DK Shivakumar candidly admitted that the state government was suffering from a paucity of funds to bankroll development projects this year as they had budgeted Rs 40,000 crores for implementing the five election guarantees.

Shivakumar made the comments in response to inquiries regarding the discontent expressed by certain Congress MLAs who have requested funds for the development of their respective constituencies.

The Congress Legislature Party (CLP) has scheduled a meeting this evening to address the concerns of these MLAs, who are disappointed that their constituencies have not received adequate development funds.

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