Newly appointed Chief Minister of Karnataka, HD Kumaraswamy, has
asked his administration to cut down on all “unnecessary expenditure” in
order to strengthen the state’s finances.
Kumaraswamy has ordered
an austerity drive, cutting down extravagant expenses like refurbishing
and renovating government offices and residences, proposals to buy new
cars and such.
The move comes after the Congress-JD(S) coalition
government announced farm loan waiver of an estimated Rs 53,000 crore,
an amount which was promised in the election manifesto of the JD(S). The
austerity drive is being seen as a move to reduce the impact of this
amount on the state’s coffers.
It is important to note, however, that the farmers had
not just demanded a loan waiver, but also to make them debt-free. If
pursued, the proposal would cost the Karnataka government a whopping Rs
1.15 trillion, which is more than 50 percent of the state’s entire
budget of Rs 2 trillion, Mint reported.
to a report by PRS Legislative Research, drought-prone Karnataka has
the highest rates of farm indebtedness—to the tune of 77 percent of the
state’s population—as against a national average of 52 percent. The
report also points out that a significant section of indebted farmers
are those who borrow from informal sectors such as moneylenders, family
Hence the benefit of the government’s proposal, which
focuses only on institutional credit, is feared not to trickle down to