Karnataka Budget 2026-27: Chief Minister Siddaramaiah presents his 17th budget, with an outlay of ₹4,48,004 crore
The Hindu
Karnataka CM Siddaramaiah presents a ₹4.48 lakh crore budget for 2026-27, despite GST revenue challenges and ongoing revenue deficits.
Karnataka Chief Minister Siddaramaiah presented the State Budget for 2026-27 with a total outlay of ₹4,48,004 crore, a 13.3% increase compared to the Revised Estimates for 2025-26, pegged at ₹3,95,307 crore. This was despite concerns over a fall in Goods and Services Tax (GST) revenue due to rate rationalisation, which seems to have been countered by an increase in the State’s share of the tax devolution pool, as per recommendations of the 16th Finance Commission.
The Budget adheres to the norms of Karnataka Fiscal Responsibility Act, 2000, though very close to the upper limits. The fiscal deficit stands at ₹97,449 Crore, 2.95% of GSDP, as against the limit of 3% and the total liabilities of the state stands at ₹8,24,389 Crore, 24.94% of the GSDP, as against the limit of 25%. The budget pegs the borrowing this year alone at ₹1.32 Lakh Crore.
Karnataka continues to present revenue deficit budgets for consecutive years now. This year it is pegged at ₹22,957 Crore, up from ₹19,262 Crore last year as per budget estimates. While the total revenue receipts of the state is estimated to be ₹3,15,050 Crore, revenue expenditure is pegged at ₹3,38,007 Crore. The state government is also undertaking one of the largest recruitment drives to fill 56,432 posts which is expected to drive up revenue expenditure further in coming years.
Compared to revised estimates of state’s own tax revenue in 2025-26 pegged at ₹1,93,100 Crore, the budget estimates for the same sees a hike by nearly 14% and for 2026-27, it is pegged at ₹2,20,000 Crore.
However, the capital expenditure has increased from ₹71,336 Crore as per budget estimates of 2025-26 to ₹74,682 Crore, a mere increase of 4.6%, even as the budget size has increased by over 13%.
Receipts from Government of India has gone up from ₹62,933 Crore in 2025-26 to ₹79,050 Crore in 2026-27, a whopping increase by over 25%. This mainly due to the 16th Finance Commission that recommended the state’s share in the divisible tax pool at 4.131%, up from 3.647% recommended by the 15th FC.
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