Finance Dept’s advice not sign of bankruptcy: K’taka govt
Bengaluru: Deputy Chief Minister and Revenue Minister G. Parameshwara on Thursday clarified that financial advice issued by the Finance Department to maintain fiscal discipline should not be interpreted as an indication that the State Government was bankrupt or without funds.
Replying on behalf of the government during a discussion on the drought situation in the Legislative Assembly, Parameshwara rejected Opposition allegations that the government had failed to act on the drought or was facing a financial crisis.
He explained that it was the Finance Department’s responsibility to caution the government against excessive expenditure and ensure spending remained within the limits approved in the Budget and Finance Bill.
“If expenditure beyond the allocation provided in the Budget is proposed, the Finance Department naturally asks where the additional funds will come from. If additional expenditure is required, a supplementary Budget must be presented, and the approval of the Legislature obtained,” he said.
Parameshwara pointed out that similar advice had been issued under previous governments. In February 2022, during the Basavaraj Bommai government, the department had warned that rising committed expenditure and limited revenue options could make it difficult to present a revenue-surplus Budget. In February 2023, when the Bharatiya Janata Party (BJP) government considered implementing the Seventh Pay Commission, the department cautioned that immediate implementation could affect FRBM limits and require additional borrowing. He also cited advice issued during the B.S. Yediyurappa government in January 2020, when revenue collections had fallen to around 70 per cent of the target.
“Can we therefore say that the government was bankrupt? Such advice is part of the Finance Department’s normal functioning,” he said.
On the current financial position, Parameshwara said the fiscal deficit for 2026–27 stood at 2.95 per cent, against the 3 per cent limit under the FRBM framework. The revenue deficit was Rs 22,957 crore, while total liabilities stood at 24.94 per cent of GSDP, close to the prescribed 25 per cent limit.
He added that the Finance Department had advised caution regarding a proposed scheme requiring Rs 1,000 crore over 2026–27 and 2027–28, suggesting that funds be earmarked or reallocated before implementation.
“This is financial advice. It is not a statement that the Government has no money,” Parameshwara said.
On drought measures, he said the government acted within three days of receiving the India Meteorological Department’s warning on April 13 that the southwest monsoon could be five per cent below normal. Then Chief Minister Siddaramaiah convened a meeting on April 16 with Deputy Commissioners and Zilla Panchayat CEOs, attended by ministers including D.K. Shivakumar. Departments were instructed to coordinate precautionary measures.
Since then, hundreds of meetings, inspections and reviews have been conducted. Karnataka recorded an overall rainfall deficit of 36 per cent, with 177 taluks declared drought-hit. Drinking water arrangements were prioritised, with Rs 117 crore released and Rs 189 crore provided through MLAs. Each MLA was given Rs 1 crore for drinking water needs.
Parameshwara said drinking water problems were reported in 531 villages across 111 taluks and 81 wards in 15 urban local bodies. Water was being supplied through tankers, private borewells and newly drilled borewells. Around Rs 420 crore was available in PD accounts under SDRF for drinking water and fodder requirements.
“There is no shortage of water. If routine or administrative problems arise, they must be resolved separately,” he said, adding that the government was continuously monitoring the situation through field-level assessments and coordination with district officials.