Bengaluru: The Karnataka government may be forced to cut spending on key sectors such as education, healthcare, and urban development in order to fund the ambitious Rs 75,000-crore Upper Krishna Project (UKP), according to an internal note from the state’s finance department, cited by Deccan Herald on Thursday.
The UKP will require an additional expenditure of Rs 75,000 crore over the next four years, roughly Rs 18,000 crore annually, based on new compensation rates approved by the Cabinet for acquisition of 1.33 lakh acres.
According to the internal note which DH said it reviewed, the finance department stated that money for the project could be raised by implementing a 20% cut in the Rs 80,197 crore developmental outlay (excluding ‘guarantee’ schemes and committed expenditure), which would free up Rs 16,039 crore. These cuts would impact department-wise allocations for education, health, urban development, and other sectors.
Alternatively, if developmental allocations are not reduced, the state may have to scale down some of its flagship initiatives. This includes revisiting allocations under the government’s ‘guarantee’ schemes and subsidies for irrigation pump sets. This year alone, Rs 51,034 crore has been allocated towards guarantee schemes. To bridge the gap, around Rs 15,000 crore could be redirected from these programs, the report added.
Under the UKP, the height of the Almatti Dam will be raised to irrigate 5.94 lakh hectares in Vijayapura, Bagalkot, Raichur, Kalaburagi, Yadgir, Koppal and Gadag districts, making it a significant project for north Karnataka.
Fund cuts are the only way forward as resource mobilisation reportedly seems unviable. The finance department mentioned that Karnataka recorded a revenue shortfall of Rs 7,413 crore in the first five months of the current fiscal year. The state is also expected to lose Rs 6,000 crore due to GST rationalisation and an additional Rs 3,000 crore in mining tax revenue, as President Draupadi Murmu has not approved the enabling law.
