CAG report highlights rising debt burden due to five guarantees
Compared to 2022-23, when net borrowings stood at Rs 26,000 crore, the state’s loans rose by nearly Rs 37,000 crore in 2023-24
Bengaluru: The Comptroller and Auditor General (CAG) report on Karnataka’s financial transactions for 2023-24 has revealed that the state government borrowed ₹63,000 crore in net market loans to fund the five guarantee schemes.
Chief Minister Siddaramaiah tabled the audit report in the Legislative Assembly, which detailed the government’s expenditure, fiscal management, and budgetary allocations. According to the report, the five guarantees accounted for nearly 15% of the total revenue expenditure during 2023-24.
The expenditure breakdown shows ₹16,964 crore for Gruha Lakshmi, ₹8,900 crore for Gruha Jyoti, ₹7,384 crore for Anna Bhagya, ₹3,200 crore for Shakti, and ₹88 crore for Yuva Nidhi. The report noted that to meet these commitments, the government raised additional loans, leading to an increase in the fiscal deficit from ₹46,623 crore to ₹65,522 crore.
Compared to 2022-23, when net borrowings stood at ₹26,000 crore, the state’s loans rose by nearly ₹37,000 crore in 2023-24. The report also flagged that capital expenditure for infrastructure development fell by ₹5,229 crore due to the diversion of resources toward guarantees.
The CAG further observed excess expenditure of ₹2,851.48 crore under eight grants during 2023-24, which needs regularization. Additionally, excess expenditure amounting to ₹2,323.74 crore from 2020-21 and 2022-23 is yet to be regularized.
Another concern highlighted was the rising balances in personal deposit accounts, which grew by 11.27% in 2023-24. The Supreme Court-mandated Karnataka Mining Environment Restoration Corporation receipts being held in such accounts contributed to this trend, raising objections about transparency and legislative oversight.
The report concluded that the state’s debt liabilities, which averaged an annual growth of 17.35% since 2019-20, rose again to 23.49% of Gross State Domestic Product (GSDP) in 2023-24, after briefly declining to 23.03% in 2022-23.
