CONGRESS FREEBIES DISASTER IN KARNATAKA
The Karnataka government presented its Budget yesterday. The Congress Party won the state election in May by promising a vast amount of freebies. The previous BJP government had presented its Budget (for the same financial year, 2023-24) in February. So if we compare these two Budgets, we can easily see the impact of the freebies.
The Budget has 4 components:
1. Revenue expenditure = Spending on welfare schemes, etc
This has increased by around ₹ 25,000 crore (+11.3%) - due to the freebies.
2. Capital expenditure = Spending on infrastructure, etc
This has decreased by around ₹ 7,000 crore (-8.2%) - to compensate for the increase in #1.
3. Revenue receipts = Income from taxes, etc
This has increased by around ₹ 12,000 crore (+5.5%) - to pay for the increase in #1.
4. Capital receipts = Income from loans, etc
This has increased by around ₹ 8,000 crore (+10.3%) - to pay for the increase in #1.
5. Fiscal deficit = Excess of spending over income
This has increased by around ₹ 6,000 crore (+10%) - due to the increase in #1.
So the impact of freebies for the 7 crore people of Karnataka is:
1. Higher taxes
2. Higher borrowings
3. Higher fiscal deficit
4. Lesser infrastructure
Or in other words - an all-round economic disaster.
The best part is Congress has declared that it will implement this 'Karnataka Model' in all the state elections this year: Rajasthan, Madhya Pradesh, Chhattisgarh and Telangana . . .
