Archive · 21 Aug 2025
Karnataka's Guarantee Schemes Raise State Debt
The state of Karnataka promised several free things, called guarantee schemes, which cost a lot of money.
To pay for them, the government borrowed a large sum, increasing the state's debt.
This led to a higher fiscal deficit and less money for building new roads and other infrastructure projects.
The CAG report highlighted concerns about rising debt and spending, indicating a potential strain on the state's finances.
Karnataka government borrowed ₹63,000 crore to fund five guarantee schemes.
The schemes accounted for nearly 15% of total revenue expenditure in 2023-24.
Fiscal deficit increased from ₹46,623 crore to ₹65,522 crore.
Capital expenditure for infrastructure development fell by ₹5,229 crore.
State's debt liabilities rose to 23.49% of GSDP in 2023-24.
- Who
- Karnataka government and the Comptroller and Auditor General (CAG)
- What
- Karnataka government's increased borrowing to fund guarantee schemes.
- When
- 2023-24
- Where
- Karnataka, India
- Why
- To finance the guarantee schemes.
Government's Perspective
Critics' Perspective
Impact of Guarantee Schemes
Government's Perspective
The guarantee schemes aimed to improve social welfare and boost the local economy.
Critics' Perspective
The schemes increased the state's debt burden and diverted funds from infrastructure.
- Net Market Loans
- ₹63,000 crore
- Fiscal Deficit (2023-24)
- ₹65,522 crore
- Gruha Lakshmi Spending
- ₹16,964 crore
- Gruha Jyoti Spending
- ₹8,900 crore
- Capital Expenditure Decrease
- ₹5,229 crore
- Debt to GSDP Ratio (2023-24)
- 23.49%