Karnataka BJP leaders held a protest at the Kengal Hanumanthaiah statue in Bengaluru on Wednesday, September 23, accusing the Congress-led state government of financial mismanagement, rising debt and diversion of funds intended for Dalit communities.
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Opposition leaders from both Houses of the Karnataka Legislature led the demonstration and sought accountability from the government. They also demanded resignations over what they described as a worsening fiscal situation.
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R Ashoka, Leader of the Opposition in the Karnataka Legislative Assembly, said development activity across the state had been affected by the financial crunch and growing liabilities. He called for the resignation of Karnataka Chief Minister and Finance Minister DK Shivakumar, alleging that the Finance Department had failed to manage the stateโs finances.
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Ashoka said the state had no funds for development and had already taken loans. He questioned how the Finance Department could face such a situation under Shivakumarโs charge and said the BJPโs demand was that he step down.
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Chalavadi Narayanaswamy, Leader of the Opposition in the Karnataka Legislative Council, alleged that the government had depleted the state exchequer and was spending the remaining funds without adequate justification. He also accused the administration of using money earmarked for the welfare of Scheduled Castes and Scheduled Tribes for other programmes.
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Narayanaswamy referred to the spending on Constitution Day celebrations, contrasting it with the governmentโs Independence Day programme. He said funds reserved for the development and welfare of SC and ST communities should not be used for such activities.
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The BJPโs allegations followed a demand made a day earlier by party MLA Dr Bharat Shetty for a white paper on Karnatakaโs financial condition. Shetty cited mounting liabilities, unpaid bills and difficulties in meeting the governmentโs financial commitments.
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Shetty said an internal Finance Department note had advised the Chief Minister and the Cabinet to remain realistic while announcing new schemes and projects, particularly as several commitments were valued at thousands of crores of rupees.
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He claimed that Karnatakaโs fiscal deficit was nearing 3 per cent, while the stateโs revenue liability had reached around Rs 22,000 crore. Shetty also alleged that the government had exhausted its borrowing capacity, with bills worth around Rs 34,000 crore pending and salary payments delayed in several departments.
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Shetty further said the state was facing a drought situation and questioned the decision to hold a Cabinet meeting in Mangaluru when the government was allegedly short of funds. He reiterated his demand for a white paper on the stateโs financial health.
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Projections for Karnatakaโs 2026-27 budget estimate the fiscal deficit at Rs 97,448 crore, or 2.9 per cent of the Gross State Domestic Product. The revenue deficit is projected at Rs 22,957 crore, equivalent to 0.7 per cent of GSDP. The state has also budgeted total borrowings of Rs 1.32 lakh crore for the financial year.
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The Finance Departmentโs caution has raised concerns over the funding of new schemes, revenue mobilisation and pressure on expenditure. The advisory also relates to the governmentโs ability to meet salary payments, subsidies and other financial obligations while taking on fresh spending commitments.
The stateโs budget projection places the targeted fiscal deficit for 2026-27 below 3 per cent of GSDP. However, the Finance Departmentโs advice has stressed fiscal prudence and the need for realistic announcements and spending plans.
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The Karnataka government has not yet issued a detailed response to all the specific allegations made by the opposition.