The Karnataka government is set to borrow approximately ₹4,000 crore weekly in the fourth quarter of FY 2024–2025, amounting to ₹48,000 crore over 12 weeks from January to March, as per RBI’s borrowing calendar for states. The financial strain is largely attributed to increased public expenditure and commitments to welfare schemes and subsidies.
Key Developments:
- Transport Fare Hikes:
- The Karnataka cabinet approved a 15% fare hike for state-run transport corporations (KSRTC, BMTC, NWKRTC, and KKRTC) to address rising operational costs.
- Speculations suggest that similar hikes may follow in other sectors to mitigate fiscal challenges.
- Milk Price Increase Consideration:
- Farmers are demanding a ₹10/litre increase in milk prices due to rising dairy farming costs. Minister K. Venkatesh acknowledged the demand but stated no final decision has been made.
- Metro Fare Revision:
- Bengaluru Metro Rail Corporation Limited (BMRCL) is considering a 15–25% fare hike, the first since 2017, to manage escalating operational expenses.
- The current metro fares range from ₹10 to ₹60, with reduced discounts for smart card users.
Political and Economic Reactions:
- BJP’s Criticism:
BJP spokesperson Prakash accused the Siddaramaiah government of creating a financial crisis, alleging that the state funds welfare schemes by indirectly burdening citizens through price hikes. - Expert Analysis:
Political analyst Harish Ramaswamy highlighted over-populism as a significant factor affecting state finances. He urged policymakers to address the imbalance between receipts and expenditures through better economic management.
Karnataka’s fiscal challenges underline the urgent need for sustainable economic reforms to balance public welfare and financial stability.
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