Karnataka: ARC recommends closing or consolidating schemes that are no longer relevant

In a first of its kind that could prioritise revenue expenditure in the State, the Second Karnataka Administrative Reforms Commission has recommended ending or consolidating about 1,000 heads of accounts (HOAs)/ schemes that are not relevant to the current times, but are yet part of the budgetary allocations. It has recommended restrictions on creating new posts in the government unless it is necessary and has recommended annual recruitment plan to ensure deployment of personnel.

The identified HOAs are from a total of 2,874 HOAs that are part of the budget that have received no funding in the budget allocation or are part of debt servicing. The commission headed by veteran Congress leader R.V. Deshpande submitted its recommendations on Tuesday.

The HOAs sought to be retired/ discontinued were found to be receiving lower allocation year after year, or were irrelevant, or not receiving a good response. Further, some of these HOAs were found to be overlapping centrally-sponsored schemes, or there are opportunities to merge or consolidate with other schemes. These have been found to have administrative expenses of more than 35%. It has suggested projects to be implemented on “mission mode” with a time frame of three to five years.

Even before the ARC made its recommendations, the government had been considering prioritising or rationalising its revenue expenditure, as the revenue deficit had increased over the last two financial years due to the implementation of five flagship guarantee schemes. Officials familiar with the issue say that in Karnataka, successive governments-despite political differences, have refrained from closing schemes but chose to continue them with no or meagre allocation.

Recommending a periodic audit of schemes to identify those that accumulate despite remaining defunct, the commission noted that allocation to about 280 HOAs (besides about 1,000 HOAs) had seen its allocation decline steeply from ₹1,336 crore in 2023-2024 to about ₹105 crore in 2025-2026. The commission said that, considering the steep decline in allocation, the schemes have either met their objectives or have lost their relevance considerably. After considering administrative expenses, the allocation to taluk and district-level is meagre that scheme implementation becomes impossible.

The commission has noted that several schemes were consistently receiving less than ₹1 crore allocation for several years, and they were providing meagre benefits due to financial limitations. The overlap with centrally-sponsored schemes is limiting the focus of funds earmarked by the State, it said, adding that over-dependence on centrally-sponsored schemes has led to scattering of State projects.

The commission found that a total of 2.94 lakh posts were vacant against the sanctioned strength across 42 departments. In all, 8.16 lakh posts have been approved, of which 5.18 lakh posts have been filled. About 70,000 personnel have been outsourced by departments.

The commission has recommended freezing outsourcing of Group C and Group D cadres and abolish obsolete and functionally irrelevant posts and fill long pending frontline vacancies on priority.

A review of the Backward Classes Department by the ARC has found that as many as 240 B.E. graduates, 180 MTech graduates, and about 2,000 MCA/ BBA/ BCA graduates were working as cooks and in other related jobs. Across departments, it has been found that among the recently recruited first division assistants, second division assistants, and junior assistants, a large number of recruited candidates were engineering graduates from streams of computer science, mechanical engineering, electronic and communication, and others. In view of strengthening the e-governance department, the commission has recommended the pooling of such resources to utilise their skills.