Fuel Done, 'Field' Next — Siddaramaiah Administration Plans To Monetise 25,000 Acres To Fund Guarantee Schemes

Sharan Setty

Jun 18, 2024, 09:45 PM | Updated Jun 19, 2024, 10:37 AM IST

CM Siddaramaiah next to DyCM DK Shivakumar. (X/Siddaramaiah)
CM Siddaramaiah next to DyCM DK Shivakumar. (X/Siddaramaiah)

Following an increase in fuel taxes, the Siddaramaiah administration is exploring a plan to monetise at least 25,000 acres of land near Bengaluru to generate funds and sustain the increased spending due to the five ‘guarantee’ schemes.

The monetisation of land, or “state-guided urbanisation,” is one of the measures recommended by the Boston Consulting Group (BCG). BCG has been engaged by Siddaramaiah’s finance department to “unlock” budget potential and is already serving as the government’s knowledge partner in attracting investments.

Generating additional resources is essential for the Siddaramaiah-led Congress government, which has allocated a substantial Rs 52,009 crore for the ‘guarantee’ schemes this fiscal year. Last year, over Rs 36,000 crore was spent on these schemes, resulting in a revenue deficit for the state.

According to information accessed by DH, the government has initially identified 15,000 acres in Nandagudi (Hoskote) and 9,800 acres in Bidadi for monetisation, where townships are proposed. Additionally, 300-400 acres across 73 land parcels are also being considered for monetisation. These lands fall under the jurisdiction of the Bangalore Metropolitan Region Development Authority (BMRDA).

Idle or vacant lands under the Bangalore Development Authority (BDA) are also being considered for monetisation.

“We are focusing on public-private partnership and state-guided urbanisation, which includes monetisation of assets,” stated Additional Chief Secretary (Finance) LK Atheeq, according to a report by Deccan Herald. “The idea is to identify untapped revenue sources while also rationalising expenditure to ensure fiscal sustainability,” he added, noting the government aims to raise an additional Rs 5,000 crore per fiscal year.

In the coming days, the government will select the best monetisation model to generate additional resources. “For example, in the BDA, there are numerous vacant properties that are not being utilised. With a rational and transparent framework, infrastructure development can be undertaken in Bengaluru using the mobilised funds,” Atheeq said.

In its preliminary report, BCG highlighted the necessity for Karnataka to increase its receipts. Karnataka’s total receipts as a percentage of GSDP is nine per cent, compared to Maharashtra’s 12 per cent, Telangana’s 13 per cent, and Tamil Nadu’s 10 per cent. Despite managing a larger budget as a percentage of GSDP, Maharashtra and Telangana benefit from a “robust” inflow of receipts.

To rationalise or reduce expenditure, the government has prioritised energy, rural development, irrigation, urban development, and public works departments.

In the energy department, for instance, subsidies for irrigation pumps and the Gruha Jyothi guarantee comprise 97 per cent of the allocated budget, presenting an opportunity for rationalisation.

Sharan Setty (Sharan K A) is an Associate Editor at Swarajya. He tweets at @sharansetty2.

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