Testing Year For Congress In Karnataka Amid Freebie Troubles, Scams: Will Siddaramaiah Govt Survive 2025? – News18

Last Updated:December 24, 2024, 22:40 IST

As the party completes half its term, analysts feel it’s important that the Siddaramaiah government refocuses on delivering its promises and raising revenues to ensure not only this but also that other development priorities are taken care of

CM Siddaramaiah and deputy chief minister DK Shivakumar have defended Karnataka’s welfare model. (File image: PTI)

Karnataka chief minister Siddaramaiah faces one of the most challenging years of his four-decade-long political career in the second-term government he is leading. The Congress may have come to power with a thumping majority of 135 out of the total 224 MLAs with the promise to fulfil its five ambitious guarantee schemes to the people of the state, but it now grapples with financial strains, criticism over these welfare programmes, and controversies such as the Valmiki Corporation and Mysore Urban Development Authority (MUDA) scams, among others.

The welfare schemes have provided the opposition BJP-JD(S) alliance a platform to sharpen its attack on the Congress government as the question looms whether the Siddaramaiah government will survive despite the freebie troubles.

Burden of guarantee schemes

The Congress government’s five flagship guarantee schemes—Shakti (free bus rides for women), Gruha Lakshmi (monthly aid of Rs 2,000 to women heads of families), Gruha Jyothi (free electricity up to 200 units), Anna Bhagya (free rice), and Yuva Nidhi (unemployment allowance)—were the cornerstone of its election campaign. These promises helped the party secure a resounding victory. But is implementation now proving to be a double-edged sword?

Karnataka chief minister Siddaramaiah, while presenting his 15th Budget, announced an outlay of Rs 3.71 lakh crore for the state this financial year and highlighted projections of Karnataka’s economy expanding by 6.6% in the financial year 2024-25.

Together, these schemes consume nearly one-sixth of the state’s Rs 3.71 lakh crore annual budget, amounting to approximately Rs 52,000 crore. This fiscal strain has raised concerns about Karnataka’s economic health. Critics, including the Bharatiya Janata Party and Janata Dal (Secular), argue that the state’s coffers are being drained, leaving little room for developmental projects.

Critique of guarantees

At one point, senior Congress MLA and Siddaramaiah’s economic adviser Basavaraj Rayareddy acknowledged the issue, stating, “The state needs to allocate Rs 60,000 crore annually for these schemes, leaving no funds for development projects.” Though the minister was pulled up, this admission lent weight to opposition claims that the government’s welfare promises could be unsustainable.

Even Congress president Mallikarjun Kharge’s advice to party units to offer only “doable” guarantees has provided fresh ammunition to the Bharatiya Janata Party (BJP).

Prime Minister Narendra Modi also criticised the Congress for what he called “unreal promises”. While Kharge dismissed Modi’s remarks as a “cheap PR stunt”.

Siddaramaiah and deputy chief minister DK Shivakumar defended the state’s welfare model.

Shivakumar claimed Karnataka’s financial health was stronger than the Centre’s, though data paints a more complex picture.

Karnataka’s financial stability

Insiders say that, under pressure to fulfil the five guarantees, the Siddaramaiah-led Karnataka government roped in Boston Consulting Group (BCG) as a consultant. The BCG has been tasked with coming up with strategies to boost revenue and plug leakages in revenue collections. The five guarantees, promised by the Congress during the assembly elections, cost the exchequer Rs 36,000 crore in 2023-24.

The state is under strain as both state tax revenues and funds from the Centre have dropped. The state’s tax revenue fell from 7.54% of GDP in 2021-22 to 6.24% in 2023-24, according to the state budget. Central grants also decreased significantly, from 1.22% to 0.55% during the same period.

One of its many suggestions is to monetise around 25,000 acres of land near Bengaluru. The Karnataka government is mulling setting up planned satellite towns in and around Bengaluru, as well as in Bidadi, Anekal, Hoskote, Devanahalli, and Doddaballapur.

The state has been trying to improve expenditure management in departments like irrigation, energy, public works, rural development, and panchayati raj.

The state government has been hoping to raise an additional Rs 5,000 crore per fiscal, according to additional chief secretary (finance) LK Atheeq, who added that more compliance in GST and property tax will also help generate more revenue.

Another Karnataka Congress MLA, HR Gaviyappa, also suggested that the poll guarantee schemes were putting a strain on the government’s finances. He said it was making it difficult to approve housing for the homeless. However, he later retracted his statement after being pulled up by DK Shivakumar.

Shivakumar, who is also the state Congress president, clarified that none of the five guarantee schemes would be stopped.

“We promised the people of the state that we would implement the guarantees, and we will keep that promise. No Congress MLA should question the guarantee schemes,” he added, stating that the party would take action if anyone did.

Karnataka guarantees for Telangana win?

Siddaramaiah said the Congress’s victory in Telangana was due to the successful implementation of guarantee schemes in Karnataka.

Siddaramaiah, who campaigned in Telangana along with his deputy, Shivakumar, dismissed claims by then Telangana chief minister K Chandrashekar Rao and BJP leaders that Karnataka’s guarantee schemes were not being implemented. He even invited Rao to Karnataka for a “reality check”.

“A year ago, no one thought the Congress could win in Telangana. The Bharat Jodo Yatra, led by Rahul Gandhi, energised our workers. The Karnataka victory, a well-planned campaign, and the success of our guarantee schemes helped gain the trust of voters in Telangana,” Siddaramaiah said.

In September, the Telangana Congress announced six guarantees ahead of the elections, hoping to replicate the success of the party in Karnataka, where it won 135 out of 224 seats. The Congress in Telangana won 64 out of the total 119 seats, while the Bharat Rashtra Samithi won 39 seats, the BJP managed to win 8 seats, AIMIM bagged 7 seats, and one seat was won by the Communist Party of India.

The Congress made the same five guarantee promises in Madhya Pradesh but lost the election, winning only 66 seats.

Centre-state tensions

Karnataka’s strained relationship with the National Democratic Alliance-led Centre has only added to its troubles. Siddaramaiah has accused the central government of ignoring the state’s financial needs, pointing to the rejection of a Rs 5,400 crore special grant recommended by the 15th Finance Commission. The chief minister even skipped the NITI Aayog Governing Council meeting, citing the Centre’s indifference towards Karnataka’s concerns.

The BJP and the Janata Dal (Secular) (JDS) have capitalised on these issues to mount a concerted attack on the Congress government. Accusations of stalled development and fiscal mismanagement have dominated their political rhetoric.

When the Congress blamed the BJP in the Centre for denying the state financial help, union finance minister Nirmala Sitharaman rejected Karnataka’s claims of neglect, accusing the Congress of creating a “poisonous narrative” and failing to fulfil its poll promises. The BJP has even revived the contentious idea of a “separate country for southern India”, first floated by Shivakumar’s brother, as a political weapon.

2025 challenging year for CM Siddaramaiah

Analysts believe that this has undoubtedly been a challenging year for Siddaramaiah. On one hand, after the assembly election win, he was unable to get a significant number of seats in the Lok Sabha for the Congress, and the reason behind the drubbing could be attributed to the work on their guarantees as well.

“There is enough empirical evidence to show that the way in which the people responded to the guarantees in some parts of the state was instrumental in the party winning the number of seats that they actually ended up winning. So not achieving the promise of getting a majority of seats, I think, was the first challenge. But being able to withstand a washout against a coalition I think was what went in their favour,” observes political analyst Sandeep Shastri.

He added that after coming to power, it has been more downhill than uphill, especially with the series of alleged corruption scandals and scams rolling out.

“The Congress had to be on the defensive on all these charges, and very often the chief minister and his deputy were left to hold the baby and defend the government,” Shastri said.

The analyst sees a political upside as well. Two factors, he says, have ensured that it was not all negative for the Congress in Karnataka.

“The first is the fact that the state BJP has been a divided house, and the infighting within the state BJP has prevented it from being more sharp in its criticism of the government. This worked to the ruling party’s advantage. Secondly, I think the hat-trick in the by-elections was a shot in their arm, which was important,” he said.

However, as the party completes half its term, he thinks it’s important that the Siddaramaiah government refocuses on delivering its promises and raising revenues to ensure not only this but also that other development priorities are taken care of.

“I believe 2025 will be crucial in terms of how some of the cases involving the chief minister pan out, and whether he will be able to weather that storm will be a critical factor to watch in 2025,” Shastri told News18.