Bengaluru: The Siddaramaiah-led Congress government in Karnataka has assured that all five pre-poll promises made by the party in the run up to the assembly elections will be implemented in this fiscal year itself.
“We had a special cabinet meeting, discussed it and have decided to implement all five guarantees this fiscal year,” Chief Minister Siddaramaiah told reporters in Bengaluru Friday.
Though the CM and his cabinet have been reluctant to share the actual cost of these schemes, Siddaramaiah on 20 May had said that five pre-poll guarantees will cost a whopping Rs 50,000 crore to the state exchequer.
“We have to streamline and prune our expenditure, cut a lot of schemes, rationalise spending to make up (the cost) and mobilise resources,” a senior government official, who wished to not be named, told ThePrint. “For the remaining, we have to borrow (more capital).”
Karnataka is one of the few states in the country whose debt to Gross State Domestic Product (GSDP) ratio is still under check. But the current liabilities are around Rs 5.65 lakh crore and the GSDP is around Rs 25.67 lakh crore, according to officials from the state finance department.
The state already gives out Rs 31,000 crore in various subsidies related to agriculture, food security and other provisions. The additional cost of the guarantees will add to this figure, the officials said. They added that the actual cost can be calculated on the number of people who sign up for the guarantees and those finally declared eligible by the government.
With revenue streams drying up due to the 15th finance commission calculations, the state is likely to go in for additional borrowings and add to the pressure on its coffers.
ThePrint takes a look at the Congress’s five guarantees and how much each will likely cost the state government.
Gruha Lakshmi
According to the officials who spoke to ThePrint on condition of anonymity, Gruha Lakshmi is possibly the most expensive of the guarantees which assures a sum of Rs 2,000 to women heads of households.
There are 1.61 crore households in Karnataka and 1.28 crore ration cards in the state, according to information shared by senior government officials.
Speaking to media persons Friday, Siddaramaiah said that all women in the state — whether from BPL or APL families — will be eligible for this scheme and this will be in addition to any government or social security pensions they currently avail.
Between 15 June and 15 July, women can submit their bank account and Aadhaar card details to apply for this scheme after deciding who the head of the household is, the mother-in-law or the daughter-in-law — a debate that has raged on in the state ever since the Congress stormed to power.
All ration cards are given to women head of households and the name of the man is mentioned only if there is no woman above the age of 18 in the residence.
By this calculation, and the assumption that all women ration card holders avail this benefit, the total cost of the Gruha Lakshmi scheme will come up to Rs 30,720 crore per year or Rs 2560 crore per month.
The government will process the beneficiaries between 15 June and 15 August and start to deposit the money directly into their accounts starting Independence Day in an event planned by the Congress party.
A software will be developed to implement the process, the CM added.
Gruha Jyothi
The Congress party has promised up to 200 units of free power for all domestic consumers in the state.
“Under this scheme, the government will take into account the one-year average power consumption and will give free electricity up to 10 per cent more than the average usage. This scheme will be applicable for the power usage from July 1, 2023. Consumers have to (must) pay the arrears till that day,” said a statement by the CM’s office Friday.
Officials fear that this scheme will add to indiscipline among consumers and increase financial liabilities.
“This scheme will cost between Rs 12,000-14,000 crore per year. In addition to existing subsidies of over Rs 14,000 crore for agriculture, the total cost of the guarantee will be around Rs 25,000 crore,” the official cited above told ThePrint.
There are 1.61 crore households in Karnataka and 2.14 crore electricity metres in the domestic segment.
ThePrint had reported that senior government officials had raised concerns about the impact of this guarantee on the power sector and even suggested that an amount be paid to beneficiaries who can then pay their electricity bills. The cabinet did not heed to these recommendations, at least two officials told ThePrint.
If the estimates hold true, then almost 80 per cent of all domestic consumption and all of the agriculture sector will cease to be paying customers.
A senior official in the state energy department told ThePrint that this scheme will have a cap of 200 units and the consumer has to pay the differential if there is a spike from the average.
“Whosoever (consumer) is past the level of consumption, his bill will be reimbursed to that much extent, subject to him being within 200 units of consumption per month. So, he will get a bill of Rs 0 and will not have to pay. If there is an abnormal increase in consumption, one has to pay the differential,” he added.
Also read: Siddaramaiah govt’s free power plan could ‘cost Rs 12,000 crore/year, increase consumption’
Anna Bhagya
An extension of the earlier scheme by the same name, this guarantee assures 10 kg of rice per head for all BPL card and ‘Antyodaya’ card holders, Siddaramaiah told reporters in Bengaluru Friday.
“The BJP government reduced the quantity of food grains from 7 Kg to 5 kg. Now the quantity of foodgrain will be increased to 10 Kg. This scheme will be launched from 1 July as the foodgrains for the month of June have already been dispatched and additional food grains have to be procured. Antyodaya card holders and BPL card holders will be benefitted,” he added.
Officials add that 5 kg of rice comes from the government of India for free but the additional cost of procuring 7 kg earlier was around Rs 6,000 crore. With the scheme now promising 10 kg rice, the additional cost of procurement is around Rs 10,000 crore, taking the total to around Rs 16,000 crore.
Shakthi
The Siddaramaiah government has announced different dates for the implementation of the proposed guarantees with the free public bus travel for women, or ‘Shakthi’, to commence from June 11.
Under this scheme, all women in the state can avail the benefits of Shakthi that will cover 94 per cent of all female travelers, according to government estimates. Barring AC and luxury buses, all public bus travel for women within the state, including inter-district, is free for all sections.
Siddaramaiah quipped that bus travel would be free for his own wife as well, while his deputy, D.K. Shivakumar, added that even Karnataka’s chief secretary (a woman) can avail this facility.
A total of 50 per cent of the seats will be reserved for women in inter-district buses, but no such restrictions will be in place for bus travel within the city.
Officials say that this scheme is likely to cost the state Rs 4,000 crore per year and further add to the growing losses of the public transport system by various city and state service providers.
The government is also planning to introduce smart cards and readers to ensure the service is provided without hassles, but acknowledge the initial hitches in implementing the guarantee, the senior government official cited above told ThePrint.
Yuva Nidhi
This guarantee proposes to give Rs 1,500-3,000 for all diploma holders and graduates who passed out of their respective courses in 2022-23. On average, there are around 4 lakh students who pass out of various courses in the state, including professional streams like medical, law and engineering, said officials.
“We have given them six months to find jobs. After six months…for two years they will be eligible…graduates will be eligible for Rs 3,000 (per month), all the diploma holders will be eligible for Rs 1,500 (per month),” Shivakumar said to reporters Friday.
Going by the guidelines, eligible candidates will have to apply to benefit from the scheme, but the first payment will only come six months later and only if the person fails to find a job. This guarantee is the least expensive and likely to cost around Rs 2,000 crore per year, officials added. This is the least expensive of the proposed schemes.
(Edited by Zinnia Ray Chaudhuri)
Also read: Siddaramaiah gets finance, plum Bengaluru for Shivakumar as rivalry spills over to cabinet allotment