Khandre told the Karnataka Legislative Council that out of the state’s 5,927 gram panchayats, most are grappling with severe cash shortages, receiving only ₹20 lakh to ₹40 lakh a year depending on population, while those around Bengaluru collect property taxes of ₹8‑10 crore annually.
He said the Centre has not released the recommended funds, despite similar technical glitches being resolved for other states, and said he has raised the matter with Union Ministers Lallan Singh, Shivaraj Singh Chauhan and V. Somanna.
Department officials explained that the “technical issue” relates to the e‑Gram Swaraj portal, where expenditure and receipt data for 2023‑24 and 2024‑25 are not being reflected correctly, and that many panchayats have failed to record receipts even though the state has already disbursed the money and provided treasury statements.
Khandre warned that the withholding of the ₹2,186.20 crore could exacerbate existing financial distress in rural bodies, especially in North Karnataka and the Kalyana Karnataka region, where local revenue streams are limited.
In the same council session, the minister highlighted a parallel crisis: over the past ten days the number of villages reporting water scarcity has risen sharply, with 799 villages now dependent on water tankers, and new reports emerging from Bengaluru South, Tumakuru and Chitradruga districts.
He urged the Centre to act swiftly on both the funding and water‑supply issues, stressing that delayed financial support could hamper the state’s ability to address the growing drought and farming distress across rural Karnataka.