Bengaluru: Congress chief Mallikarjun Kharge’s rebuke to party leaders in Karnataka for announcing guarantees without thinking about the budget seems to have backfired, with Prime Minister Narendra Modi slamming the party for “making unreal promises”.

“The Congress Party is realising the hard way that making unreal promises is easy but implementing them properly is tough or impossible. Campaign after campaign they promise things to the people, which they also know they will never be able to deliver. Now, they stand badly exposed in front of the people!” Modi said in a series of posts on social media platform ‘X’.

“…..Their so-called Guarantees lie unfulfilled, which is a terrible deceit upon the people of these states. The victims of such politics are the poor, youngsters, farmers and women, who are not only denied the benefits of these promises but also see their existing schemes diluted,” the PM added.

Later in the day, Kharge and Siddaramaiah slammed the prime minister for his attack on the Congress and its government in various states.

Kharge called out the “Lies, Deceit, Fakery, Loot & Publicity” of the Modi government in a lengthy post on ‘X’. “Modi ji, before finger-pointing, please note that – MODI KI GUARANTEE is a cruel joke on 140 Crore Indians!” he said.

Similarly, the CM suggested Modi to take “a hard look” at BJP’s “disastrous legacy in Karnataka”. “BJP left Karnataka plagued with 40% commission corruption, draining resources that could have transformed lives. We’re using that same 40%—redirecting it to benefit the people. What was your ‘achievement’ here? Empowering corrupt practices, leaving Karnataka debt-ridden, and using propaganda to cover up your failures?” Siddaramaiah posted on ‘X’.

The PM’s statements came a day after Kharge pulled up the Siddaramaiah-led Karnataka government’s messaging to the public when he called for a “review” of its free public bus rides to women scheme or Shakthi.

“Don’t assure 5, 6,10 or 20 such promises …don’t do this… give guarantees according to your budget….. If you give guarantees without the budget for it, you will go bankrupt,” the Congress national president had said Thursday in the presence of CM Siddaramaiah and his deputy D.K.Shivakumar.

Shivakumar had remarked that the state government will ‘review’ its Shakthi (free bus rides for women) scheme, which the Congress president said, had given room for doubt on if the scheme will be discontinued.

Since it stormed to power in Karnataka last year, the Congress has replicated its guarantees as a poll strategy in Telangana, improved its tally in Haryana and is now preparing for a grand roll out in poll-bound Maharashtra and Jharkhand, according to people aware of the developments.

With nearly a quarter of the Karnataka budget set aside to fund the five guarantees, Kharge’s remarks came amid growing criticism of the Siddaramaiah government of focusing excessively on its welfare brand of politics and leaving little space for other developmental activities in Karnataka.

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‘Karnataka model’

There are five guarantees announced by the Karnataka government that are estimated to cost around Rs 52,000 crore annually.

Shivakumar on Friday categorically stated that the guarantees will not be stopped or withdrawn and that his statements were ‘twisted’. “There is absolutely no question of withdrawing any of the five guarantee schemes. But we can’t force the guarantee schemes down the throat to people who do not want it.”

As of 18 October, a total 535, 64,91,122 free rides had been availed by women passengers since 11 August 2023 when it was launched, costing over Rs 7507 crore. Unlike other guarantees, Shakthi is available for all women, irrespective of their economic status.

“(The) Karnataka guarantee Model is the model for the entire country , the BJP and other parties are also adopting it ..we are proud that we could implement that, deliver it….” Shivakumar told reporters.

But several Congress MLAs and other leaders have asked for a rethink on the schemes as funding it is leaving no money for other development works by which they can show some semblance of work in their constituencies, multiple leaders who spoke to ThePrint said.

Cash-strapped Karnataka has increased prices of liquor, stamps and registration and other taxes to raise capital.

In the post-GST regime, the states are forced to rely on their own taxes to raise money to bankroll welfare schemes. Estimates by the Karnataka government shows that for every rupee the state sends to the Centre, it receives around 13 paise. The Siddaramaiah government has brought it in at least two bodies, including the Boston Consulting Group, to identify avenues for resource mobilisation.

State economic situation

Siddaramaiah held a series of meetings Wednesday, reviewing collection of taxes and revenue targets of each government department. “The government has silenced critics questioning its ability to fund welfare guarantees, having already allocated Rs 24,235 crore out of a budgeted Rs 52,009 crore. Leveraging e-governance models, the state ensures accurate identification of beneficiaries, eliminating inefficiencies while maximizing the impact of welfare schemes,” the Chief Minister’s Office said in a statement.

It added that the state was growing at around 11.2 percent–higher than the national average–to show how fiscally prudent the administration was.

But cash flow is not a problem in Karnataka, especially in the initial months of the fiscal year, officials say.

“There is no cash flow problem in Karnataka. Most of the loans were taken in the last quarter,” said a senior government official.

Siddaramaiah presented a revenue deficit budget for 2024-25 in February. Its total liabilities at 2024-25 is estimated to be Rs. 6,65,095 crore, which is 23.68 percent of state’s GSDP, may still be under the guidelines of the fiscal responsibility act, but the mounting debt and growing infrastructure needs has added to the debt burden.

“The cash flow is not bad but overall if this same trend of cash outflow continues for another six months, we may lose about Rs 12,000 crore,” Basavaraj Rayareddi, the economic adviser to Siddaramaiah, earlier told ThePrint.

He added that the total bill of all of the state’s subsidies and guarantees schemes had a bill of around Rs 90,000 crore and it was imperative to identify and monetise revenue streams at the earliest.

The state is also trying to weed out ineligible BPL (below poverty line) card holders to reduce the beneficiaries getting free foodgrains to bring down expenditures on welfare.

(Edited by Tony Rai)

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