Union Finance Minister Nirmala Sitharaman on Sunday blamed the Congress government for high inflation and insecurity in Karnataka.
Finance Minister Nirmala Sitharaman slams Congress government over high inflation in Karnataka (PTI) {{^userSubscribed}} {{/userSubscribed}} {{^userSubscribed}} {{/userSubscribed}}
Responding to Karnataka Chief Minister Siddaramaiah saying the central government had wronged the state, Sitharaman said the state’s economy had deteriorated mainly due to hikes in fuel, milk and stamp duty prices and sluggish capital investment. “The state government is responsible for high inflation, which is much higher than the national average. Why am I saying this? Inflation in June 2023-June 2024 is 6.1 per cent in Karnataka as against the national average of 5.4 per cent,” Sitharaman, who is an Upper House member from Karnataka, told reporters here.
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Contrasting the BJP government in the state with the current Congress government, the minister said that between June 2022 and May 2023, Karnataka’s inflation rate was lower than the national average. While the national average was 6% between June 2022 and May 2023, Karnataka’s inflation rate was contained at 5.39%, Sitharaman pointed out. Giving reasons, the finance minister said petrol and diesel prices were increased by Rs 3 and Rs 3.5 respectively; milk prices were increased by Rs 5, real estate index value was increased from 25% to 30%, stamp duty was increased from 200% to 500%, vehicle registration fee was increased by 3% and additional lifetime tax was imposed on electric vehicles.
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“The revenue deficit is very large and capital expenditure is not being done or even cut. Statements are being made that money cannot be spent on capital expenditure because we are implementing the welfare, five packages (guarantees) that I promised. If we do not spend money on capital expenditure, jobs will not be created in Karnataka. Youth will not be employed. If capital expenditure money is not spent, demand will not increase, consumption will not increase and youth employment will not happen,” she said. Sitharaman said Karnataka’s open market borrowings are on the rise and have already crossed the Rs 10,000 crore mark.
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“Just two years ago, Karnataka was running a revenue surplus, but now it is running a revenue deficit. Industries are moving out, law and order are deteriorating and SC/ST funds are flowing out,” she alleged.
Sitharaman denied Siddaramaiah’s claim that Karnataka has not received its due allocation in this year’s budget and said a lot of misinformation is being spread about the allocation of funds. Sitharaman termed the state government’s claim that the Centre has not given Karnataka its due allocation as “completely false”. Sitharaman said that in 10 years of tax devolution under the Congress-led UPA government from 2004 to 2014, Karnataka received only Rs 81,791 crore, but under Prime Minister Narendra Modi from 2014 to 2024, Karnataka has received Rs 2,95,818 crore.
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“For a quick comparison, under UPA, you (Karnataka) got Rs 8,179 crore through tax devolution in 10 years, while PM Modi has given Rs 45,485 crore this year alone,” she pointed out. Karnataka got a grant of Rs 60,779 crore in 10 years under UPA, which means Rs 6,077.9 crore per year. But under the NDA rule last year, it was Rs 2,36,955 crore. She also pointed out that from post-COVID 2020-21 to 2023-24, Karnataka got a total of Rs 8,312 crore interest-free loans over 50 years.
The allocation for Karnataka Railways in 2009-14 was Rs 8,350 crore, while in the 2024-2025 budget, Rs 7,559 crore has been allocated to the department, the finance minister explained. Thirty-one projects related to laying of new railway lines worth Rs 47,016 crore are underway in Karnataka, Sitharaman said, adding that 638 railway flyovers have been constructed since 2014. Seven Vande Bharat trains are also running in the state. For smart city projects, seven cities have been selected and Rs 6,428 crore has been allocated to Karnataka, she said.
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She added that 904 work orders worth Rs 15,000 crore have been issued in connection with the project. 4,600 roads have already been constructed in Karnataka. The NDA government has already invested over Rs 1,000 crore in highways-related projects in the last few years. Many greenfield projects are under construction under the Bharat Mala project phase-1, the finance minister said.
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News / Cities / Bengaluru / Finance Minister Nirmala Sitharaman slams Congress government over high inflation in Karnataka
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