Karnataka is projected to borrow approximately ₹4,000 crore each week during the fourth quarter of the financial year 2024–2025, totalling ₹48,000 crore over 12 weeks from January to March, according to RBI’s indicative borrowing calendar for states. This was first reported by The Hindu.
The borrowing surge comes when the state’s finances are under strain, attributed to mounting expenditure on public schemes and “freebies”. Recently, the Karnataka cabinet approved a 15 per cent hike in bus fares for four state-run transport corporations—Karnataka State Road Transport Corporation (KSRTC), Bengaluru Metropolitan Transport Corporation (BMTC), North West Karnataka Road Transport Corporation (NWKRTC), and Kalyana Karnataka Road Transport Corporation (KKRTC).
The fare revision, the government said, was necessary to offset rising operational costs. However, there is speculation of additional rate hikes across other sectors, driven by the state’s ongoing fiscal challenges.
On Friday, Minister for Animal Husbandry K Venkatesh, addressing the media, said, “There is pressure from the farmers to increase the price of milk. The reason why is the price of the essentials for dairy farming has gone up. They are demanding a ₹10 increase (per litre) but we are yet to finalise anything. We have to give back to the producers. Nobody wants to suffer a loss.”
Also, the Fare Fixation Committee (FFC), tasked with recommending the appropriate fare revision for Namma Metro, is soon expected to submit its final report to the government.
The Bengaluru Metro Rail Corporation Limited (BMRCL) is contemplating a 15-25 per cent fare hike, the first since a 10-15 per cent increase in 2017. At present, the minimum token fare is ₹10, while the maximum is ₹60. Smart card users enjoy a 5 per cent discount, down from the earlier 15 per cent, a reduction implemented in 2020 to address escalating operational expenses.
BJP spokesperson Prakash said, “They are now making arrangements for the additional resources. The only option left for the State Government is to increase the prices of other essential commodities. GST has barred a majority of the price hikes from the state ambit. Whatever is left with the state government, they are raising the prices — KSTRC, milk, petrol, diesel, cess on new car purchase — the list goes on. They give freebies with one hand and collect money with interest from the other. This is a financial crisis under Siddaramaiah in the state.”
Harish Ramaswamy, a Political Analyst, added the flip side of democracy is over-populism in the interest of winnability, resulting in anti-poor policies that seem to be in favour of the poor outwardly but in reality, will work against the interest of the poor.
“Presently in Karnataka, the situation is similar to that. The new generation of voters must realise no government is running on its own mint but on the tax imposed on people. It’s a matter of redistribution and not equal distribution. These are facts that burden a state exchequer. Hence this imbalance between receipts and expenditure. It’s high time politicians and economists come together and redesign these economic issues for better management of public finances,” he said.