Congress freebies to burn a hole in state exchequer; Hike in taxes not ruled out

Shyam Sundar Vattam | NT

Bengaluru: It will not be a bed of roses for the Congress Party that won a whopping 136 seats of the total 224 seats in the recently held Assembly elections because of the challenges in meeting the promises made to people of Karnataka in the form of guarantees.

To woo voters, the Congress promised 200 units of power for each house, Rs 2000 per month for the woman head of a family, Rs 3000 stipend for unemployed graduates every month, free bus passes for women, 10 kg rice, and Rs 1500 per month as an allowance for youth with a diploma.

According to a rough estimate, all these freebies together will cost the exchequer around Rs 45,000 crore to Rs 60,000 crore every year. In the post-GST era, state governments have limited scope to levy new taxes except on certain items. But one of the reasons why people voted for the Congress Party was the imposition of heavy taxes on all items that made the lives of common people miserable.

Already, the patience of people has been tested to the maximum because of price rise and any additional taxes would certainly anger them. According to a rough calculation, there are around 2.18 crore houses in Karnataka, and giving 200 units of power to each house would alone cost around Rs 40,000 crore to Rs 45,000 crore.

The monthly payment of Rs 2000 to a woman in a family would cost around Rs 10,000 crore, Expenditure of several crores of rupees towards the payment of stipend to degree holders and diploma holders, and free bus rides for women would leave the exchequer depleted and the State Transport Corporations bankrupt.

The nonoperation of KSRTC buses during the Covid period caused massive losses to the corporation and the government had to pay hundreds of crores to thousands of employees. On top of it, giving a free ride to women would further bleed the corporation. Besides, the entire burden would fall on male travelers as school children enjoy the bus pass and there is a concessional pass for senior citizens too.

No clarity So far, the Congress party has not clarified on the families to be eligible for the free 200 units scheme, the criteria for selection of women to receive Rs 2000 per month and the ceiling, number of students to be given stipend, and the free bus ride for working women. Clarity is expected to emerge after the first cabinet meeting.