As it nears its second year in power, the Karnataka government has remained firm on continuing its welfare schemes while simultaneously increasing taxes on essentials such as milk, water, power, and energy. While the Congress justifies these hikes as necessary adjustments to inflation, the BJP alleges that the state’s poor financial planning is being passed on to consumers.
Since coming to power, the Karnataka government has introduced a series of fare and tax hikes, including increases in EV registration fees, sales tax on petrol and diesel, as well as recent hikes in metro fares, bus fares, garbage collection fees, and power tariffs. While the state has managed to reduce its revenue deficit from ₹27,354 crore in 2024-25 to ₹19,262 crore, the government is relying on these hikes to manage rising expenditures.
Hole in the pocket
| Category | Increase by |
|---|---|
| Power | 36 paise |
| Metro | 45-50% |
| Bus | 15% |
| Sales tax on petrol | 3.92% |
| Sales tax on diesal | 10%-15% |
| Medical service fees | 4.10% |
| Stamp duty and registration fee | 13-47% |
| Excise duty on MRP of all brands of liquor | 20% |
| Beer duty | 10% |
| State-run universities | 10% annual hike |
Proposed hikes
| Category | Increase by |
|---|---|
| Milk | Rs 5 |
| Water tariff | 1 paise/ litre |
Balancing welfare, and rising costs
The BJP’s State President B Y Vijayendra has criticised the Congress-led government, calling it a “pickpocket government” that offers free welfare schemes while simultaneously increasing tariffs.
Meanwhile, Congress has defended its decision to raise rates. Speaking to businessline, Congress spokesperson B.L. Shankar stated, “Due to inflation, rising prices, and the overall economic situation, the cost of providing basic facilities to the public is increasing. The government is incurring heavy expenditures in these areas, and naturally, the only way to manage this is by passing some of the burden onto consumers.”
Explaining the scope of the welfare schemes, he highlighted that the five initiatives—Gruha Lakshmi, Shakti, Gruha Jyothi, Anna Bhagya, and Yuva Nidhi—provide direct and indirect benefits worth ₹4,000 to ₹5,000 per month to beneficiary families. However, he noted that these schemes have well-defined eligibility criteria. “As far as the Anna Bhagya scheme is concerned, it is only for BPL (Below Poverty Line) holders. The power subsidy under Gruha Jyothi applies only to households consuming up to 200 units and does not extend to commercial users. The Shakti program, which provides free transport for women, is limited to non-AC, ordinary red buses, typically used by the lower-middle-class and economically weaker sections. Only Gruha Lakshmi has no such restrictions,” Shankar clarified.
Political analyst Harish Ramaswamy pointed out that the government’s tariff-driven approach signals a lack of structured economic policy. “On one hand, the government is distributing money through welfare schemes, but on the other, it is raising funds by increasing prices across various sectors.
If economic planning were sound, there would be no need for constant tariff hikes. A more policy-driven approach, such as forming a committee to study inflation and price rises, would allow for a more structured and sustainable financial strategy rather than resorting to ad hoc tariff increases, he said.
Statewide Bandh
In a separate development, Karnataka is bracing for a statewide bandh on Saturday, with 3,000 pro-Kannada organisations calling for a shutdown from 6 AM to 6 PM. This follows an incident on February 2, where a group of Marathi youths allegedly assaulted bus conductor Mahadev near Sulebhavi-Balekundri in Belagavi for not speaking in Marathi.