Congress Roll Out Promises Freebies In Karnataka Amid Financial Sustainability Concerns

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After the sweeping victory in Karnataka, the Indian National Congress (INC) has been in headlines, for its announced promises and freebies to voters.  While the Siddaramaiah led Karnataka Government is all set to roll out their promises, finance experts suggest that these promised freebies could lead to a major economic mishap in the South Indian state.

The question started to arise after Mr. Siddaramaiah, the Chief Minister of Karnataka, introduced ‘Shakti’ Scheme, under which  free bus travel would be provided to women.  Approximately, 41.8 lakh women of the State will be benefited with this new scheme, daily.  

In addition, the Indian National Congress also announced  Rs. 2,000 assistance to women and 200 unit power to every household.  For unemployed youths, the State Government promised Rs. 3,000 to graduate unemployed youth and Rs. 1,500 to diploma holders.  Lastly, in their fifth guaranteed promise, the Congress Government assured free 10 kg rice to every registered voter in the State.

The Indian National Congress Government estimated the cost of Rs. 65,082 crores to fulfill the promises.  Although the promises made the political party win in the south Indian state, the maintenance of the freebies could badly affect the economical situation.

Experts Analysis of Promised Freebies:

The promised freebies will lead to a major economic crisis in Karnataka.  Explained byMG Chandrakanth, Rt, Director of Institute for Social Economic Change, the economic crisis due to freebies will lead to a total deficit of Rs 1,25,613 crores.  With this unsustainable module of freebies, the economic deficit of annual budget will be more than 3%.

Experts also said, “Karnataka which has up until now been an economically healthy State will turn into an ill-health State.”

Former Karnataka Government BJP also slammed the Congress and asked about the GDP and the growth of Karnataka, as all the freebies will cost additional burden to the economic condition of Karnataka.

BJP also slammed the Siddaramaiah Government for becoming a hurdle in the growth of the state and projects in suburban and urban regions.  The freebies which led to the victory of Congress in Karnataka is said to be responsible for the sinking situation of Karnataka.

However, if finances are managed well and Tax are taken by people on several products, the economic situation could be handled better.  Many analysts said, if the government can only cut costs through a reduction in revenue expenditure which may imply no recruitment

With the roll out of the new freebies policies and five guarantees, it would be a challenge for the Karnataka Government led by Congress to sustain their term, with growth and additional fiscal burden due to policies.

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