Karnataka: CM Siddaramaiah taps booze, property markets to fund poll pledges

Interim Budget 2024 key announcements for common man: The government plans to boost infrastructure spending by 11% in the upcoming fiscal year while keeping the fiscal deficit in check. Finance Minister Nirmala Sitharaman outlined initiatives for the next five years, including increased housing and enhanced medical care for women. The government aims to reduce the fiscal deficit to 5.1% in the next financial year. Sitharaman allocated Rs 11.1 lakh crore to capital spending, a notable 11.1% increase. She also announced the launch of the Housing for Middle Class scheme and the promotion of Cervical Cancer Vaccination for girls aged 9-14 years.

The total amount of additional spending for which the approval sought is ₹2 trillion, but the net cash outgo is limited to ₹78,672 crore, showed the supplementary demands for grants document tabled in the Lok Sabha.

The term Ahinda may have been coined by the late Devaraj Urs, Karnataka’s first chief minister, in the 1970s, but Siddaramaiah, who will be sworn in as the state’s new chief minister later this week has given his own spin to the term derived from the Kannada acronym for Alpasankhyataru or minorities, Hindulidavaru or backward classes, and Dalitaru or Dalits | Latest News India

The elevation of 75-year-old Siddaramaiah as the leader of the Congress Legislature Party, prior to him being sworn in as Chief Minister of Karnataka, is a dream come true for the veteran politician who had set his eyes on the coveted position for a second term, after a gap of five years. This comes after a bitter contestation for the top post between him and KPCC president D.K. Shivakumar.

Siddaramaiah was speaking at the launch of the registration of Congress party's fifth and final poll guarantee 'Yuva Nidhi' offering unemployment assistance of Rs 3,000 to graduates and Rs 1,500 to diploma holders who passed in the academic year 2022-23. Is Modi an economist? He had said that Karnataka will go bankrupt if the five guarantees are implemented. The reality is that the state has grown financially strong now with the implementation of five guarantees, the chief minister claimed.

Finance Secretary T V Somanathan believes that the government's target of reducing the fiscal deficit to 5.1% of GDP in 2024-25 is ambitious but achievable. This is based on the assumption of growth in tax revenue of 11.5%, an increase in non-tax revenue, and a nominal GDP growth rate of 10.5%. Somanathan also mentioned the control over avoidable expenditure and a balanced increase in capital expenditure as factors contributing to the target. He dismissed criticisms on capital expenditure, stating that the increase is realistic and necessary for the economy.

One expects welfare spending to spike before elections. But this Budget goes against the grain.

The government aims to limit the increase in overall spending to around 10% in the interim budget for FY25, balancing the need for sustained growth with fiscal consolidation imperatives. It plans to achieve this by raising capital expenditure at a slower pace, while moderately increasing revenue spending. The government has set a fiscal deficit target of 4.5% of GDP by FY26 and expects to meet the target this year.

The Congress Legislature Party in Karnataka will hold a meeting tomorrow to decide the new chief minister. Siddaramaiah and DK Shivakumar are the main contenders. G. Parameshwara, a Congress veteran and Dalit leader, could emerge as a dark horse, but the party is unlikely to surprise anyone.

Budget News: In the upcoming budget for 2024-25, the government plans to increase dividend earnings significantly, targeting about Rs 70,000 crore from the Reserve Bank of India (RBI) and financial institutions (FIs). Find out more about the budget plans and the role of FM Nirmala Sitharaman.