While farm loan waiver will be the focus, Kumaraswamy is also expected to announce new programmes for urban Karnataka.
Bengaluru: Karnataka chief minister H.D. Kumaraswamy is all set to present his maiden budget on Thursday, and it is expected to be a tightrope walk as he seeks to please his party’s constituency while ensuring that alliance partner Congress isn’t unhappy either.
The budget needs to balance the flagship schemes of the previous Siddaramaiah-led Congress government and the poll promises made by the chief minister. The highlight is the highly contentious farm loan waiver worth Rs 30,000 crore.
The formulation of the budget had led to the first signs of friction in the state’s JD(S)-Congress coalition government, with the bone of contention being whether the newly-formed government should take forward the interim budget passed by the previous Siddaramaiah administration or present a full-fledged one.
The two sides have, however, struck conciliatory notes. After several rounds of meetings and deliberations, the differences were ironed out in a coordination committee meeting of the coalition government Sunday, where the Congress was assured that the Kumaraswamy budget would continue to implement all flagship programmes of the Siddaramaiah government.
The chief minister personally assured Siddaramaiah that there would be no reduction in the allocation of funds for the highly popular Anna Bhagya scheme, through which, the previous Congress government had made food-grains affordable to the poor.
Kumaraswamy had told ThePrint last week that Siddaramaiah suggested that the government pass a supplementary budget but added that he had assured his predecessor there would be no major changes in the new budget. “I have made a commitment to the people that I will have to fulfill. I will do my best to ensure that I deliver all that I have promised. I will not change whatever the Congress government has done,” he had said.
The Kumaraswamy-led government appears to have also made efforts to bring about a balance between the rural and urban sectors, and undo the image of the JD(S) being a rural-oriented party.
While the farm loan waiver will be the focus, Kumaraswamy is also expected to announce new programmes for the urban population in terms of housing and infrastructure, garbage management and creation of satellite towns. It is expected that Kumaraswamy may seek the help of corporates to donate funds, as part of the corporate social responsibility, towards the farmer loan waiver.
Senior economist and former director of the Institute for Social and Economic Change (ISEC), R.S. Deshpande, believes that the chief minister has a task on his hands, particularly as he has promised to continue with the Congress welfare schemes.
“It is a tightrope walk for Kumaraswamy as there are no resources and generating funds is difficult. We are already quite deep in debt. The government needs Rs 54,000 crore to fulfil the promises that Kumaraswamy has made and with the bhagyas, the total budget could reach Rs 62,000 crore. What remains is just Rs 100 odd crore and in this what was promised in the earlier and present budget needs to be done. The CM must focus more on revenue generation rather than on expenditure management.”
Loan waiver
The budget will announce the much-talked-about farm loan waiver that is estimated to cost the state exchequer close to Rs 30,000 crore. Sources in the government said that to tide over any shortfall, the chief minister has identified welfare schemes that have been causing huge revenue losses and has decided to either plug the loopholes or reduce fund allocation. The PDS scheme, where irregularities have been detected in the distribution of subsidised food grains to Above Poverty Line (APL) card families. Siddaramaiah’s ‘Raitha Belaku’ scheme, to provide direct income assistance to rain-deprived farmers, may also be put on the back burner for now.
The government is also expected to tap into funds that had been allotted to several dormant schemes.
Another important decision that the government is expected to make is ensuring the effective collection of property taxes and regularising several residential layouts once the Supreme Court decides on the case relating to the regularisation of unauthorised layouts.
This is expected to mobilise Rs 25,000 crore for the government, which it could divert for the farm loan waiver. The waiver will also be implemented in stages, and that would reduce the stress on the state’s coffers.
“Not every farmer deserves a loan waiver. Loans should be disbursed after taking into account some data analytics. The agricultural department should get details of loans taken in the name of a farmer, the size of land holding, outstanding bank dues and the other assets. Many have taken loans and bought motorbikes. The hard-earned money of taxpayers should not go for this but for developmental purposes,” Deshpande said.
Infrastructure and garbage management
The budget is expected to contain special allocation for effective garbage disposal and management in this budget. Bengaluru did raise a stink during the BJP’s 2008-2013 rule as garbage had piled up in the city due to ineffective disposal.
The present government is expected to come up with new schemes and technology to tackle the garbage problem in the state. On an average, Bengaluru generates close to 15,000 metric tonnes of waste in a day and every city development minister has been faced with the challenge of effectively disposing of it.
The budget will focus on possible memorandums of understanding (MOUs) that could be signed with private companies to deal with the issue.
Urban infrastructure will also be a key point in the budget. After Sunday’s coordination committee meeting, it was decided that 10 lakh houses will be built in the next five years. There will also be a major focus on skill development to create new jobs.
Preparations for 2019
This budget is also a primer for the upcoming 2019 elections. If the government manages to present a populist budget, it would improve the coalition’s chances in the upcoming Lok Sabha elections. Kumaraswamy had told ThePrint during an earlier interaction that the coalition was expecting to get close to 25 of the 28 Lok Sabha seats in the state in 2019. If that is the case, Kumaraswamy will have to balance urban and rural needs to keep voters on the side of the coalition.
A minority budget: BJP
BJP state president B. S. Yeddyurappa termed Kumaraswamy’s budget as a ‘minority budget’ as, he added, it only had the approval of the 37 JD(S) MLAs. “There is no consensus on the budget. Siddaramaiah had objected to the full-fledged budget but he (Kumaraswamy) has decided to present one nevertheless. It is clear that it has the approval of just 37 JD(S) MLAs,” he told reporters Wednesday.