FM Sitharaman Criticizes Karnataka for Rising Inflation and Deteriorating Investment Climate

In a recent press conference, Union Finance Minister Nirmala Sitharaman sharply criticized Karnataka’s Congress government for exacerbating the state’s economic and administrative issues. She highlighted that Karnataka is experiencing inflation rates of 6.1%, surpassing the national average of 5.4%. This increase in inflation is attributed to recent hikes in fuel, milk prices, property guidance values, and various other charges, which have collectively strained the state’s economic environment.

Sitharaman emphasized the contrast between current and past inflation rates, noting that Karnataka once maintained an inflation rate lower than the national average. The rising costs have been compounded by significant hikes in petrol and diesel prices, a substantial increase in stamp duty, and a higher lifetime tax on electric vehicles.

The Finance Minister also pointed out the worsening law and order situation in the state, which she claims is driving companies away. According to Sitharaman, the capital expenditure in Karnataka has sharply declined, which has hindered employment growth and economic development. She expressed concerns about the state’s growing revenue deficit and excessive open market borrowings, which now exceed Rs 1 lakh crore.

Sitharaman criticized the Karnataka government for failing to effectively utilize SC-ST funds and for poor administrative decisions, including controversial changes to language quotas and working hours for tech professionals. She suggested that these factors are contributing to a declining investment climate, turning what was once a revenue-surplus state into one that now frightens potential investors.

The Finance Minister called for a reassessment of the state’s economic policies and administration, emphasizing the need for effective capital expenditure and improved law and order to restore investor confidence and economic stability.