Karnataka's bucket of woes: A listless Congress, divided BJP, citizens burdened by poor infra and price hikes

With a strong mandate, people expected a stable government and good governance. However, the Congress-led Karnataka government has been mired in controversies and faces simmering public anger over price hikes, with its only relief being the divided BJP-led opposition.

Siddaramaiah said that Rs 52,062 crore is allocated annually for five poll guarantee schemes—free non-AC bus travel (Shakti), 200 units of free power (Gruha Jyoti), Rs 2,000 per month for women heads of families (Gruha Lakshmi), 10 kg free rice per BPL member (Anna Bhagya), and Yuva Nidhi (Rs 3,000 to graduates and Rs 1,500 to diploma holders who are unemployed).

“These schemes benefit 1.3 crore families, providing them Rs 4,000–Rs 5,000 per month”, said Siddaramaiah.

However, the opposition argues that these guarantees are affecting development work. MLAs from both Congress and BJP have raised concerns over fund shortages affecting infrastructure projects in their constituencies. There are also complaints about delays in releasing funds for Gruha Lakshmi, Anna Bhagya, and Shakti schemes.

On the one hand, the government claims to be putting more money into people's hands through guarantee schemes, but on the other, it has introduced a series of price hikes. Bus fares have been hiked by 15 percent, Metro fares by up to 71 percent, fuel prices have risen by Rs 3 per litre, and property guidance values by 15-30 percent. Other items that have become costlier include milk, stamp duty, liquor, hospital charges, transport cess, and high-end electric vehicles. The government has also hinted at a water tariff hike and another increase in milk prices.

Bengaluru’s infrastructure takes a hit

While Bengaluru, the country’s tech and start-up capital is facing stiff competition from neighbouring states, little has been done to fix the city's infrastructure woes—traffic congestion, potholes, building collapses, poor waste management, delays, waterlogging, and shortages.

Also, read: Mohandas Pai says city deserves good minister and infrastructure to realise 'Brand Bengaluru'

Shivakumar received 70,000 public suggestions under ‘Brand Bengaluru’ but prioritised Rs 1 lakh crore worth of grand projects—tunnel roads, elevated corridors, and a sky deck—without an elected city council or public consultation. Amid a fund crunch, these projects remain on paper, while existing works are stalled.

In October 2023, for instance, Shivakumar set a 100-day deadline to fix the tech corridor Outer Ring Road’s (ORR) issues, but the Outer Ring Road Companies Association (ORRCA) says nothing changed. In September 2024, while Shivakumar was in the US, Siddaramaiah conducted a city-wide inspection and urged the chiefs of the civic body (BBMP) and Metro (BMRCL), both under the Bengaluru development portfolio, to speed up work.

Also, read: Bengaluru's Outer Ring Road Companies Association flags poor condition of tech corridor

A senior bureaucrat told Moneycontrol that the CM appears to have ‘lost control’ over the administration. “Despite a clear majority, governance has suffered in the state. Many efficient officers have left for Central and foreign deputations, while others are frustrated as a select few hold key portfolios. When there are dual power centres, governance inevitably takes a hit.”

He added, “SMK (former CM SM Krishna) could deliver because he placed efficient officers in key positions. Unlike his tenure, there has been no major administrative overhaul, leaving Bengaluru’s situation unchanged.”

However, businesses continue to bet big on Karnataka, which has provided some relief to the government. The recently concluded Global Investors Meet—Invest Karnataka 2025—secured Rs 10.27 lakh crore in investment proposals, with 70 percent in Beyond Bengaluru clusters. The challenge now is ensuring timely approvals and land allocation to convert these proposals into reality.

Also, read: Karnataka receives Rs 10.27 lakh crore investment proposals during investors' meet, likely to generate 6 lakh jobs

Impact of guarantees

Bureaucrats see a stark contrast between Siddaramaiah 1.0 and 2.0. “His current term is just a shadow of his previous term (2013-18), likely due to dual power centres, financial burden of guarantees, strained Union government's disparity in devolution of taxes and releasing drought relief funds,” another senior IAS officer told Moneycontrol.

“Siddaramaiah, once known for fiscal discipline, is unwilling to roll back guarantees, knowing this is his last term to leave goodwill among the people. These guarantees should have been implemented in a phased manner or limited to BPL families, but unfortunately, that was not done. Many departments have not received their allocated funds in the budget,” he said.

Karnataka government blames the Union government’s disparity in tax devolution for the crisis. "Karnataka’s finances are being strained as the Union government denies the state its rightful tax share and grants to discredit our welfare programmes," said Siddaramaiah.

Also, read: ‘Delhi Chalo’ stir: Siddaramaiah, Cong legislators protest Centre’s ‘financial injustice’

"Despite remitting Rs 4 lakh crore annually, Karnataka gets back only 15 paise per rupee. The 15th Finance Commission’s tax share reduction has cost the state Rs 68,775 crore in five years," he added.

There has been a sharp cut in capital expenditure, and its reduction means fewer investments in infrastructure projects that drive economic growth and create jobs in the state. For 2024-25, the Karnataka government allocated Rs 55,877 crore in the state budget for capital expenditure, 27.5 percent lower than the revised Rs 77,105 crore for 2023-24.

Siddaramaiah is set to present Karnataka’s 2025-26 budget on March 7, marking this his record 16th budget. The capital expenditure allocation remains to be seen as the government is tightening the screws  on resource mobilisation.

BJP questioned the effectiveness of guarantee schemes, citing recent suicides in rural areas due to debt traps after people were forced to take loans from private financial institutions at high interest rates. In response, the Karnataka government introduced the Microfinance (Prevention of Coercive Actions) Ordinance, 2025, to curb high-interest rates and coercive recovery tactics.

Fire-fighting govt

Ahead of the 2023 assembly polls, Congress leveraged the previous BJP-led state government’s `40 percent commission’ allegations and five guarantees to position its Karnataka model of governance to the rest of the country.

Karnataka's victory boosted the party nationally, but a prolonged crisis in AICC chief Mallikarjun Kharge’s home state could hurt the Congress’s image and prospects.

Recent poll results also show welfare schemes alone don’t guarantee victory—AAP’s Delhi seats fell from 62 in 2020 to 22 in 2025, and YSRCP’s Andhra Pradesh assembly tally dropped from 151 in 2019 to 11 in 2024, despite extensive welfare schemes.

Also, read: SC has come down against freebies, but how much burden are they adding?

Divided opposition

While the BJP won 17 of the 28 Lok Sabha seats in Karnataka, its 3-0 defeat in the assembly bypolls—including losses for Basavaraj Bommai and HD Kumaraswamy’s sons—deepened the crisis for the party, which views the state as its gateway to the South.

Also, read: More rift in Karnataka BJP comes out in open as Janardhana Reddy and Sriramulu spar

Revolts against state chief B Y Vijayendra and a public spat between B Sriramulu and Janardhan Reddy exposed internal rifts in the party. Senior leaders still question Vijayendra’s leadership, with divisions surfacing during the Bengaluru-Mysuru padayatra over the MUDA scam.

With former CMs Bommai and Kumaraswamy—both elected to the Lok Sabha—absent from the assembly,  BJP struggles to corner the government under Leader of Opposition R  Ashoka. As one observer put it, “Congress has too many leaders, while BJP has too few.”

Also, read: Of guarantees & hikes: Karnataka govt walks a tightrope amid calls to limit benefits