Bengaluru, May 2 Referring to the Union Finance Ministry's Monthly Economic Review for April 2026, Karnataka Bharatiya Janata Party (BJP) President and MLA B.Y. Vijayendra on Saturday criticised the state government's guarantee schemes and expressed concern over the state's financial management.
He said that due to "unscientific financial management", more than 15 per cent of the state's revenue receipts are being spent on interest payments, while the state is facing a revenue deficit of 0.7 per cent.
He termed the situation "alarming".
In a statement, Vijayendra alleged that the Centre's warning to the Karnataka government has become evident, citing concerns over the state's financial management.
"Due to the politicisation of guarantee schemes and other populist programmes, there is no money left for development and priority sectors in the state," he said.
Quoting the Union Finance Ministry's Monthly Economic Review for April 2026, Vijayendra added that the report clearly confirms that states with revenue deficits, including Karnataka, are under severe financial stress.
The State BJP President also criticised the state government, claiming that political considerations and "competitive populism" behind guarantee schemes have resulted in a lack of funds for development and priority sectors.
He warned that the state government is losing its ability to respond to potential financial crises and emergency situations.
Questioning Chief Minister Siddaramaiah, Vijayendra said that draining the state exchequer in the pursuit of power and pushing future generations into a debt trap is unjust.
He urged the Chief Minister to set aside political considerations and focus on restoring the state's financial stability in the interest of Karnataka.
The Union Finance Ministry's Monthly Economic Review for April 2026 provides a comprehensive assessment of India's macroeconomic landscape, recently highlighting both national resilience and specific fiscal concerns for individual states.
The review has raised concerns about Karnataka and eight other states over revenue deficits and debt burdens, warning that they may face an economic crisis in the future.
The Centre, in its written communication to the states, did not directly attribute the revenue shortfall and rising debt to guarantee schemes; however, it has warned the states on several occasions about the potential risks associated with such guarantees.
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