Shivakumar’s new sops won’t be a burden on exchequer, say experts

Bengaluru: The eight key decisions which chief minister DK Shivakumar unveiled during his first cabinet meeting a week ago signal a continuation of welfare-focused governance while largely avoiding major new fiscal commitments, experts and officials say.

While concerns were raised that the decision could further strain the state’s finances, officials say most measures remain within manageable financial limits. CMO officials say the only significant new expenditure is the proposed allocation of Rs 1,000 crore for youth clubs across the state.

“Besides this, the inclusion of male students under the free bus pass scheme will tax the govt an additional Rs 250 crore,” said an official.

Among the announcements were plans to launch a labour exchange portal aimed at facilitating private-sector employment and the release of a recruitment calendar to fill 56,000 govt positions.

The cabinet also approved extending occupancy certificate and completion certificate exemptions to sites measuring up to 2,500sqft (60x40 sites), and expanding B to A-khata conversions across the state.

Economist Narendar Pani said the measures appeared to continue the govt’s focus on guarantee schemes, albeit on a smaller scale than those introduced in 2023.

“The financial implications of the schemes do not have a major impact on the state exchequer,” said Pani. He argued that if implemented effectively, the initiatives could contribute to long-term human resource development and generate broader economic benefits.

Pointing to the youth clubs proposal, he said that it could help address social issues among youngsters, including rising drug use linked to parental migration and inadequate supervision.

“A youth club may help address this issue by providing youngsters with a sporting outlet and an environment of responsibility,” said Pani, adding that free bus passes may also help increase attendance in schools.

But some experts expressed reservations about expanding welfare measures, arguing that their economic impact may diminish over time. “The first five guarantees had a direct impact on the economy by increasing the purchasing power of citizens, but the new announcements are only an extension without the same impact,” some experts said.

Attention is now on the govt’s next policy moves, especially in agriculture, where Shivakumar is reportedly considering major reforms. Sources say proposals have been presented to the CM for technology initiatives designed to improve productivity while reducing fiscal pressure.

“But he has a different plan in mind, and we will have to wait and see,” officials said.