The share of capital expenditure to the total outlay of the Budget Chief Minister Siddaramaiah presented on Friday has come down to 15% from 16.5% in the Budget he presented in July 2023. Before that, in the Budget presented by Basavaraj Bommai in February 2023, just before the Assembly polls, the share of capital expenditure to the total outlay was 19.8%, the highest in a decade. This was a Budget prior to the introduction of the guarantee schemes.
But, contrary to popular perception, it is not the guarantee schemes alone, but salaries, pensions, and interest payment on loans that have ballooned significantly reducing funds for capital expenditure.
Where money goes
The share of scheme-based committed expenditure, which are linked to specific schemes or programmes, which saw a big jump from 31% in 2022-23 to 42% in 2023-24, when guarantee schemes were introduced, has remained a constant at 42% in 2024-25 as well. But the share of non-scheme-based committed expenditure, which is essentially salaries, pensions, loan repayments, and other administrative expenses, has risen from 56% in 2023-24 to 61% in 2024-25.
However, considering the absolute numbers, the Medium Term Fiscal Plan 2024-28 states: “The government’s commitment to boost economic growth by investing in infrastructure development has been reflected in the constant raise in capital expenditure of the State.” But it lists “focus towards increasing the capital expenditure” as one of the strategic priorities of the government in 2024-25.
Capital expenditure has increased in terms of absolute numbers compared to the July 2023 Budget, where it was pegged at ₹54,374 crore. It is now estimated to be ₹55,877 crore. But this is a drop in terms of the share of capital expenditure of the total outlay. Even in terms of absolute numbers, it is a drop from the Budget estimates of February 2023, in which it was pegged at ₹61,234 crore.
Though the share of capital expenditure of the total Budget outlay - 15% for 2024-25 - is lower when compared to the last few Budgets, data shows that Mr. Siddaramaiah himself presented Budgets in 2014-15 and 2015-16 where the share of capital expenditure was lower than 15%.
However, while the total outlay of the Karnataka Budget increased by 205% from 2013-14 to 2024-25, capital expenditure also increased correspondingly by 204% in the same period, when absolutely numbers are taken into account.
