The Congress party has come to power in Karnataka. In a sweeping decision that is expected to have far-reaching ramifications, the Siddaramaiah government has ordered the stoppage of funds and payments to any orders given by the Basavaraj Bommai government. The decision is a broad-based one that will apply to all government departments, including boards and corporations. No pending work sanctioned by the previous government can be taken up.
The cancellation of contracts is expected to have a negative effect on the investment climate. Businessmen enter into contracts in the hope of a predictable environment. If governments change/end contracts as per their whims, investors will take a flight to other states.
There is also a fear that the Congress government's decision will put a spanner in the wheel of the infra juggernaut. The funds will be diverted to funding freebies. "All the funds for infra building will be spent on freebies now. Road, Rail, and Metro projects will be delayed and some may be scrapped as well," a Netizen wrote.
