Bengaluru: Karnataka chief minister Siddaramaiah on Wednesday attributed the state’s robust GST growth to increased public spending under the Congress government’s guarantee schemes, asserting that welfare-driven consumption had bolstered local demand and employment without burdening the state’s finances.

Speaking at an event organised by the Fiscal Policy Institute, Siddaramaiah said that social welfare initiatives, rather than straining the exchequer, had played a catalytic role in stimulating the state’s economy.

Welfare schemes boosting revenue

“These schemes have neither burdened the exchequer nor fuelled inflation. In fact, by increasing consumption at the bottom of the pyramid, they have stimulated local demand, enhanced revenue buoyancy, and reduced rural unemployment,” Siddaramaiah said in his address.

He highlighted that Karnataka’s GST collections in October 2025 stood at ₹14,395 crore, representing a 10% year-on-year increase, placing the state second only to Maharashtra.

The CM argued that direct benefit transfers and free public services under guarantees such as Shakti, Gruha Jyothi, Anna Bhagya, Yuva Nidhi and Gruha Lakshmi had multiplied spending capacity among low-income households, creating a positive ripple effect across sectors.

“A family of four is now receiving around ₹10,000 per month on average. The Shakti scheme alone has boosted women’s workforce participation by 23%, improving household incomes and urban mobility,” he said.

Centre denying state funds, says CM

Reiterating his long-standing grievance, Siddaramaiah accused the Union government of withholding ₹25,000 crore annually that Karnataka is entitled to. “Despite being one of the highest contributors to the national exchequer, the state continues to face injustice in devolution and grants,” he said.

Officials from the state finance department added that Karnataka’s sustained growth in GST revenue has been accompanied by improved compliance and digital monitoring under the e-way bill system.

BJP urges CM to raise sugarcane price

Meanwhile, the ruling Congress came under attack from the BJP over the ongoing farmers’ agitation in north Karnataka. Former chief minister Basavaraj Bommai urged Siddaramaiah to ensure that sugarcane farmers receive ₹3,500 per tonne, aligning with their long-standing demand.

Speaking to reporters, Bommai said, “I have already urged the chief minister to fix the sugarcane price at ₹3,500 per tonne. However, the CM seems indifferent towards the farmers and is preoccupied with political calculations to retain his post.”

He suggested a shared payment model in which sugar factories pay ₹3,300 per tonne while the state government contributes ₹200 per tonne.

Farmers in Belagavi, Bagalkote, and Haveri districts have been protesting for over a week, demanding higher procurement prices. Bommai alleged that several ministers have “vested interests in the sugar industry” and warned that continued inaction would intensify the protests.

Citing by-products such as ethanol and electricity, Bommai said that mills were financially capable of absorbing the hike. “The government must act fast,” he added.

BJP releases satirical ‘musical chair’ video

Adding to the political heat, the BJP released an AI-generated video mocking the Congress government’s internal tussle for leadership. The video depicted Siddaramaiah, deputy chief minister DK Shivakumar, and ministers G Parameshwara and Satish Jarkiholi playing a game of musical chairs, captioned “Countdown to the November Revolution!”

The post alluded to persistent rumours of a rotation of the chief ministership, a topic that has resurfaced intermittently since the Congress came to power in 2023, with Shivakumar settling for the deputy CM’s post.

Recently, Siddaramaiah’s son Yathindra Siddaramaiah had remarked that minister Jarkiholi could be a “potential successor” to his father, triggering speculation of internal factionalism. The chief minister, however, dismissed the remarks as “baseless gossip.”

Economic optimism amid political turbulence

Despite political controversies, economists note that Karnataka’s consistent double-digit GST growth reflects strong consumption and industrial activity, supported by welfare-driven demand.

With both fiscal optimism and political rivalry intensifying, the coming months are expected to test the Congress government’s ability to balance social spending, agrarian concerns, and political stability ahead of the 2026 Lok Sabha elections.