Chief Minister Siddaramiah announced his second budget during his current tenure as head of the government. With an overall budget outlay of Rs 3.71 lakh crore, the budget has been a promising one on several fronts. The five guarantees: Gruha Jyoti, Gruha Lakshmi, Anna Bhagya, Shakti and Yuvanidhi, which were announced in the election manifesto of 2023 and are being implemented over the past one year, received a budget allocation of Rs. 52,000 crores.

Focus on the five guarantee schemes

The chief minister justified the additional allocation and spending on the five guarantees, citing inflation and increasing income disparity in the state. It is estimated that approximately Rs. 50,000 to 55,000 would be transferred to each family every year through guarantee schemes. Manjula, 55, a domestic worker, who is a benefactor of the schemes and a resident of Bellandur, says: “I have started receiving Rs. 2,000 in my bank account for the last few months, this has been very helpful for me.” However, the implementation of the Gruha Lakshmi scheme has faced several technical issues in matching names and accounts and has resulted in delays in disbursing funds.

Protection for gig workers

Another extremely progressive move in the budget was the proposal to fund the livelihood security and insurance of platform based Gig economy workers. The implementation of this scheme, likely to benefit about 200,000 gig economy workers, comes at a time when their numbers are rising rapidly each year, yet they receive almost no social security coverage. The state has proposed levying a 1-2% cess on online transactions to fund the welfare of gig workers. 

Karnataka, so far, is the second state in the country to come up with the Gig and Platform Workers’ Bill and this move is being welcomed and appreciated by workers. Seneora, a migrant from Manipur who works as a beautician for an online platform offering home-based salon services, was elated when she was informed about the proposal in the budget. “This would be very helpful to us, we come thousands of kilometers away from our families work in this city and such an insurance will provide us with a great sense of security.” 

White-topping roads 

After returning to power, the Siddaramiah government launched the ‘Brand Bengaluru’ initiative, inviting suggestions from citizens to enhance infrastructure and governance in the city, prioritising the infrastructure challenges in Bengaluru. During the budget speech it was announced that the white-topping or cement road construction of 147 km long major roads in Bengaluru will be completed by December 2025. It has been proposed to resolve traffic congestion in the city by constructing underground tunnels. While such projects might help resolve some of the infrastructure challenges, it is still a piecemeal approach towards the larger challenge of improving governance and service delivery in the city. 

Read more: CAG audit 2021-22: Revenue concerns, PSU returns hinder Karnataka’s fiscal efficiency

Top down budgeting process

Overall, it must be noted that the budgeting for most Indian states is done on the principles of incremental budgeting and, to some extent, activity-based budgeting. These approaches have their limitations in budget tracking and transparency. Thus, it is almost impossible for a common citizen to track the actual expenditure under any budget ahead in the past year. Overall, the budgeting process in states continues to remain top-down with almost no participation from citizens in the process.

Aditi Raja–a former Indian Audit and Accounts Service officer and former Finance Director of Karnataka Power Transmission Corporation Limited– now a resident of Whitefield, emphasised the need for budgets to be more inclusive and ground-up in terms of decisions regarding allocations. “There should be a way to track and ensure the budget allocations actually improve the quality of life of the citizens of the state. Much more emphasis and focus should be directed towards the basics: public health and education.”

In the current budget, the overall funding for the health sector remains the same as last year at 4 % (Rs.15,145 crore) of the total Budget. The focus this time is only on upgrading public health infrastructure, strengthening lab services, and establishing critical care hubs in every district.

Read more: Karnataka government should focus on basic rights rather than luxuries

In terms of budgetary allocations, about 12 % of the budget has been allocated for the education sector. This is still lower than the average spend on education by other states, which is about 15%. The state also announced supplementary nutrition in schools to fight malnutrition and promote the overall well-being of students; the budget allocates funds for this for all children from classes one to ten.

Critique of cash in lieu of rice

Overall, the budget allocation under gender budget is Rs. 86,423 crore, which is 23% of the total planned expenditure. The allocation for children stands at Rs. 54,617 crores, which is 14% of the total expenditure. 

Karnataka has been a leader in gender budgeting in the country and has been practicing the same since 2007. 

Kathyayini Chamaraj, Executive Trustee CIVIC, critiquing announcements in the budget says: “The budget has continued providing cash to PDS beneficiaries in lieu of the extra 5 kg of free grain announced by the chief minister, amounting to almost Rs.10,000 crores. Instead of trying to procure rice from other states to finance this extra 5 kg of grain, the government should have announced the procurement of millets, pulses and oil seeds from our own farmers and distribute these through the PDS. Then this Rs. 10,000 crores would have gone to our own farmers, who are struggling without MSP for these items.”                   

“It would have put cash in the hands of rural populations and boosted the economy. It would have helped overcome malnourishment by giving pulses through the PDS; it would have led to sustainable agriculture as these grains grow with less water.”

Overall, as the national elections are round the corner it was expected that this budget was going to be a populist one and would focus on highlighting the importance of the five guarantees and the change that it has brought about. However, even as the government prioritises the five guarantees, it must acknowledge the long-term to short-term trade offs being made.  

Though several promises and statements were made during the budget announcement, only the coming months will tell the actual impact and change brought about.

Also read:

• Declining allocation and underutilisation: BBMP’s budget for non-physical infrastructure over the years
• Before Bengaluru gets bored with tunnel roads