Bengaluru: The 5th State Finance Commission for the 2026-30 period has asked the govt to tread cautiously on continuation of the five guarantee schemes, while stressing the need to mobilise additional resources. In its 542-page report tabled in the assembly Tuesday, the panel said the guarantee schemes are “expected to ensure adequate provision to meet basic requirements and empower marginalised sections of society”. With an estimated allocation of Rs 51,034 crore for 2025-26, the largest share going to Gruha Lakshmi scheme which provides Rs 2,000 for women heads of households, the commission, headed by former MP C Narayanaswamy, nonetheless urged financial caution. “Though continuation of the guarantee schemes is needed to provide basic universal income to all needy people as well as to empower women, it is imperative to mobilise additional resources through innovative means and also increase own source revenue and efficiency in tax collection and other alternative measures,” the report states. The commission noted that while increased consumption from such welfare spending can have a multiplier effect on demand, income and employment, it must be supported by expansion in supply of goods and services. It said productive capacity needs to grow alongside adequate investments to sustain the benefits of higher consumption. Separately, the panel recommended increasing the share of rural local self-govts to 45% and that of urban local self-govts to 15%, taking the total share of local bodies to 60% of the state’s non-loan net own revenue receipts. Of the 45% allocation recommended for rural local self-govts, the commission proposed that the largest share should go to taluk panchayats at 64%, followed by 26% to zilla panchayats and 8% to gram panchayats for the 2026–30 period. The commission also noted that for the first time it has considered “slum population” as an indicator in place of illiteracy while allocating funds to urban local self-govts.
