Karnataka Budget: Funds crunch eats into food subsidy in big way

With the State facing a financial crunch, as many as six crucial sectors have seen reductions to a tune of ₹2,213 crore in terms of subsidy allocated in the State Budget.

The biggest reduction — ₹1,209 crore — has come in the food subsidy bill. It is down from ₹3,755 crore in 2019-20 to ₹2,546 crore. A big chunk of this subsidy goes into the Anna Bhagya scheme, which was launched by Congress leader Siddaramaiah’s regime to overcome the problem of hunger.

In the housing sector, subsidy that normally goes into ensuring housing for the poor in rural and urban areas under various schemes has seen a reduction in allocation from ₹2,057 crore to ₹1,250 crore.

The total subsidy extended by the State government has come down from ₹25,688 crore in 2019-20 to ₹23,475 crore. Acknowledging this, a senior finance official said, “Some schemes that were old have been stopped and many departments themselves asked for the removal of some schemes, resulting in the drop in subsidy amount.” When asked whether the big drop in food subsidy meant a reduction in the Anna Bhagya scheme size, Chief Minister B.S. Yediyurappa did not clarify.

Among the departments that have seen a reduction in subsidy are Education (from ₹538.11 crore to ₹390.46 crore), Women and Child Development (from ₹309.42 crore to ₹100 crore), and Agriculture and Horticulture (from ₹2,865.59 crore to ₹2,661.32 crore). The subsidy towards milk has declined from ₹1,362.27 crore to ₹1,250 crore.

However, the subsidies extended to Home, Transport, Cooperation, Commerce and Industries, and Power departments have seen increases to a tune of ₹420 crore.

Allocation to services

The allocations to crucial social services and economic services have come down by ₹5,717 crore, while that to general services has increased by ₹8,665 crore.

Funds set aside for social services, which include public health, housing, social security, welfare (including SC/ST welfare), have come down by ₹3,250 crore, from ₹68,296 crore in the revised estimates of 2019-20 to ₹65,046 crore in 2020-21. Similarly, allocation to economic services, that include agriculture and allied activities, rural development, water and power, industry and minerals, transport and communication, is down by ₹2,467 crore.

However, the allocation to general services has increased from ₹50,937 crore to ₹59,602 crore. Chief Minister B.S. Yediyurappa said this was on account of an increase in salaries and allowances. Debt servicing of ₹11,604 crore is included in general services.

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Printable version | Oct 6, 2022 6:25:49 pm | https://www.thehindu.com/news/national/karnataka/karnataka-budget-funds-crunch-eats-into-food-subsidy-in-big-way/article30994449.ece