Guarantees will push State into financial crisis: Bommai

The State will be heading towards a “financial crisis” if the Congress government continues to implement its five guarantees without mobilisation of revenue for another 2-3 years and spends loans of ₹1.05 lakh crore for meeting the revenue expenditure in the year 2024-25, said former Chief Minister and BJP leader Basavaraj Bommai.

The State will be heading towards a “financial crisis” if the Congress government continues to implement its five guarantees without mobilisation of revenue for another 2-3 years and spends loans of ₹1.05 lakh crore for meeting the revenue expenditure in the year 2024-25, said former Chief Minister and BJP leader Basavaraj Bommai.

Speaking on the State Budget tabled in the Legislative Assembly last week by the government, Mr. Bommai said the government has not set aside funds for implementation of the 7th Pay Commission report, which needed another ₹20,000 per year. It has been utilising loans for meeting revenue expenditure and not capital expenditure.

The BJP was not against guarantees, but the government had not done any preparation for implementing five guarantees by mobilising financial resources, said Mr. Bommai. The State’s growth would go back another 10 years with the non-execution of development works for the next 2-3 years, he said.

On the government’s charge against the Centre in the devolution of taxes, cess and surcharges, Mr. Bommai said both State and Centre have been levying cess and surcharges and they were being used for infrastructure development such as metro rail. The Centre paid GST compensation of ₹1,6258 crore to the State during the last five years. While GST compensation discontinued after 2022, he said the Union government continued to levy cess and surcharges to fund infrastructure projects in states.

On the denial of ₹6,000 crore for the peripheral ring road by the Centre, he said the State government has not made any detailed project report to develop the road. Tenders have been called thrice in the past and no developer participated in it owing to enormous land acquisition cost and compensation, Mr. Bommai said.

The Centre not only shares taxes but also supports the State government by giving funds for implementing various schemes such as Jal Jeevan Mission, PM Awas Yojana, Ayushman Bharat, Amrut scheme, PM Kisan Samman Nidhi, National Rural Health Mission, national highway, airports and port projects and many other Centrally-sponsored schemes. Moreover, no department had incurred expenditure over 60% of the allocated funds till mid-February 2024, he argued.