Karnataka BJP President and MLA B.Y. Vijayendra criticized the state government’s guarantee schemes on Saturday, stating that these initiatives are placing severe pressure on the state’s financial situation. He expressed concern over the state’s financial management.
Vijayendra referenced the Ministry of Finance’s monthly economic review from April 2026, highlighting that “unscientific financial management” has led to over 15% of the state’s total revenue being spent solely on interest payments, while the state faces a revenue deficit of 0.7%. He described this situation as “worrisome.”
In a statement, Vijayendra claimed that the warning issued by the central government to the Karnataka administration is now evident, as the state’s financial management is under scrutiny. He remarked, “Due to the politicization of guarantee schemes and other populist programs, there is no funding left for development projects and priority sectors.”
The BJP leader asserted that the report from the Ministry of Finance clearly indicates that states like Karnataka, which are experiencing revenue deficits, are under significant financial pressure. He accused the state government of engaging in “competitive populist politics,” suggesting that the focus on political gains from guarantee schemes has resulted in a lack of funds for development and priority areas.
Vijayendra warned that the state government is losing its ability to handle potential financial crises and emergencies. Targeting Chief Minister Siddaramaiah, he stated that depleting the state treasury for political gain is not appropriate and risks burdening future generations with debt.
He urged the Chief Minister to rise above political considerations and focus on restoring the state’s financial stability for the benefit of Karnataka.
Notably, the Ministry of Finance’s April 2026 economic review assessed India’s broader economic situation, expressing concerns about revenue deficits and increasing debt burdens in Karnataka and eight other states, along with the potential for future economic crises. However, while the central government did not directly attribute revenue shortfalls and rising debt to guarantee schemes in its written communication to states, it has repeatedly warned of the potential risks associated with such programs.