Bengaluru, 23 Sept (H.S.): Karnataka’s finance department has advised the state government to exercise caution in taking on new spending commitments, warning that its borrowing capacity is nearly exhausted.

In a note to the Chief Minister’s Office, the department said decisions should reflect the state’s available resources and avoid adding to the cost of works already awaiting completion. It also cautioned against taking up projects costing more than ₹1,000 crore without funding provisions in the 2026–27 budget or a clear plan to raise resources.

Chief Minister D.K. Shivakumar said the advice had been given in the government’s interest. “As finance minister, I know which schemes should be dropped and which should be introduced,” he said.

Defending the government’s five guarantee schemes, Shivakumar said they were introduced to support households facing rising prices and falling incomes. The government remained committed to the livelihoods of farmers and the wider public, he added. He also called on the Centre to release grants due to Karnataka, including ₹5,300 crore announced for the Upper Krishna Project’s third phase.

Leader of the Opposition R. Ashoka cited the finance department’s note to accuse the Congress government of mismanaging state finances. He claimed there was little scope for additional borrowing to fund large projects announced in the budget.

Ashoka said farmers were suffering from drought while the government faced what he called a “financial drought”. He alleged that unpaid bills across departments had reached ₹2 lakh crore and that transport corporations, irrigation corporations and power companies were under severe financial strain. He further accused the government of diverting funds earmarked for Scheduled Caste and Scheduled Tribe programmes.

Ashoka also questioned the government’s position on electricity subsidies. He said Energy Minister K.J. George had stated that no subsidy payments were pending, while the finance department had called for funds to be released to the energy department.

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Hindusthan Samachar / Arun Lakshman