{"id":"f-e550251d2f-955fb30a-ace7-53fd-9611-a4fa022b5b61","title":"Guarantees, welfare schemes, GST rate rationalisation constrained Karnataka's fiscal position: Govt","description":"Karnataka government reports fiscal strain from five guarantees, welfare schemes, and GST changes, but projects continued economic growth for 2025-26.","timestamp":1766042521,"category":"business","headline":"Guarantees, welfare schemes, GST rate rationalisation constrained Karnataka's fiscal position: Govt","modifiedHeadline":"Karnataka's Finances Strained by Welfare Costs","subCategories":["scid_edbc7f13"],"region":"IN","bundleMetaData":{"bundleId":"7b48871c-c993-4956-b43d-6f46f8e1b036","bundleTitle":"Today In India","cardData":null},"iabCategoryId":"85","fcSummary":"Karnataka's fiscal position is strained by welfare schemes and GST changes, increasing revenue expenditure and deficit. The state is mobilizing tax revenues and rationalizing spending to address this, while projecting continued economic growth supported by rainfall.","summary":"Karnataka's finances strained! Welfare schemes & GST changes hit hard. Future growth projected despite current fiscal challenges.","ctaUrl":"https://trends.glance.com/newz/India_News/IN/en/cnbc-tv18/f-e550251d2f-955fb30a-ace7-53fd-9611-a4fa022b5b61","sourceUrl":"https://www.cnbctv18.com/india/guarantees-welfare-schemes-gst-rate-rationalisation-constrained-karnataka-fiscal-position-govt-ws-l-19795004.htm","bannerImage":"https://g-mob.glance-cdn.com/public/fc/image/5FKNHAWdasJ0.webp","content":"The Karnataka government on Wednesday said that the five guarantees and other welfare schemes and GST rate rationalisation have constrained its fiscal position.\n\n
\n
\n The state's economy is expected to remain on a growth trajectory this fiscal, supported by adequate rainfall, the government said in its report titled 'Mid-Year Review of State Finances', presented in the Assembly.\n
\n
\n The five guarantee schemes are 'Gruha Jyothi' offering 200 units of electricity free to every household, 'Gruha Lakshmi' scheme promising ₹2,000 to every woman head of a family and 'Anna Bhagya' offering 10 kg rice to every member of the BPL family a month.\n
\n
\n The 'Yuva Nidhi' promises \n₹3,000 dole to unemployed graduates and ₹1,500 to unemployed diploma holders for two years (in the 18-25 age-group), and 'Shakti' scheme permits free travel for Karnataka women to travel within the state in government run non-luxury buses.\n
\n
\n \"The increase in committed expenditure, including the state’s spending on guarantees and various welfare schemes has increased the revenue expenditure,\" the report said.\n
\n
\n \"Simultaneously, the shortfall in revenue receipts on account of GST rate rationalisation has further constrained the state’s fiscal position. These factors have collectively increased the revenue deficit during the current financial year,\" it underlined.\n\n
\n
\n To mitigate these challenges, the state said it has undertaken concerted efforts to mobilise its own tax revenues to increase the revenue collections.\n
\n
\n \"Additionally, expenditure rationalisation initiatives are being pursued to contain non-essential spending and protect allocations for priority development sectors, to narrow the revenue deficit in the remaining part of the year,\" the government said.\n
\n
\n The report said the state’s economy is expected to remain on a growth trajectory this fiscal, supported by adequate rainfall.\n\n
\n
\n The government projected the Gross State Domestic Product (GSDP) at ₹30,91,111 crore for 2025-26, citing the Ministry of Finance.\n
\n
\n \"State economy is expected to continue its growth trajectory in 2025-26, with adequate rainfall likely to further boost agricultural output, while strong performance in the services and industrial sectors sustains economic momentum,\" the report said.\n
\n
\n The government said inflation remained under control during the first half of the fiscal year, aided by a good monsoon that helped keep food prices low.\n\n
\n
\n Karnataka’s fiscal performance in the first half of 2025-26 was strong, with revenue collections recording a year-on-year growth of 7.7%, the report said.\n
\n
\n \"The state continues to demonstrate robust tax administration and economic activity, ranking second in the country in gross GST collections during the first half of 2025-26,\" it added.\n
\n
\n In terms of expenditure, total spending in the first half reached 36.4% of the budget estimates. Expenditure on capital projects increased by 32.3% compared with the same period in 2024-25, the report said.\n\n
\n
\n The fiscal deficit for the state, which has a budget of ₹4,09,549 crore for 2025-26, is estimated at 2.95% of the GSDP.\n
\n
Also Read: EC to start issuing SIR hearing notices in West Bengal on ThursdayDelhi airport cancellation update\n
","readDurationInMinutes":"5","author":{"name":"CNBC TV18","logo":"https://glance-mob.glance-cdn.com/public/bubble/jpeg/ecc3d19b-fc52-4a39-881c-5b0936ae723b.jpeg"},"ism":false,"analyticsResponses":[{"measurementId":"383191425","type":"COMSCORE"}],"pointerSummary":["Karnataka's welfare schemes & GST impact finances, increasing revenue deficit.","State aims to boost tax revenue & cut spending to address fiscal strain.","GSDP projected at ₹30,91,111 crore for 2025-26; strong GST collections reported."],"tags":["Karnataka","FiscalPolicy","StateFinances","WelfareSchemes","GST","EconomicGrowth","GruhaJyothi","GruhaLakshmi","AnnaBhagya","YuvaNidhi","ShaktiScheme","RevenueDeficit","GSDP","TaxRevenue","FiscalDeficit","KarnatakaGovernment"],"consent":true,"redirectionEnabled":false}

Guarantees, welfare schemes, GST rate rationalisation constrained Karnataka's fiscal position: Govt

SUMMARY