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Karnataka CM Siddaramaiah Presents ₹4.48 Lakh Crore Budget 2026-27 Amid GST Revenue Challenges

Karnataka presents ₹4.48 lakh crore budget for 2026-27 with focus on education, health, women, and social welfare. CM Siddaramaiah criticises GST revenue shortfall and Union govt allocations.
Karnataka CM Siddaramaiah Presents ₹4.48 Lakh Crore Budget 2026-27 Amid GST Revenue Challenges

Bengaluru, 6 March 2026: Karnataka Chief Minister Siddaramaiah today presented the state budget for 2026-27 with a total outlay of ₹4,48,004 crore, marking a 13.3% increase over the revised estimates of the previous year. In his 17th budget presentation, the CM sharply criticised the Union government for causing financial pressure on the state through GST rationalisation, reduced Finance Commission allocations, and delayed special grants, claiming a total loss of around ₹65,000 crore during the tenure of the 15th Finance Commission.

 

“We must ensure that our policies benefit farmers, workers, women, students, and vulnerable groups with clarity and purpose,” Siddaramaiah said, describing the budget as a “live document echoing the dreams and confidence of Karnataka’s people.”

 

Key Budget Highlights

  • Total Outlay: ₹4,48,004 crore

  • Revenue Expenditure: ₹3,38,007 crore

  • Capital Expenditure: ₹74,682 crore

  • Loan Repayment: ₹35,316 crore

  • Revenue Deficit: ₹22,957 crore

  • Fiscal Deficit: ₹97,449 crore (2.95% of GSDP)

  • Total Liabilities: ₹8,24,389 crore (24.94% of GSDP)

  • Borrowing Estimate: ₹1.32 lakh crore

 

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Priority Allocations

  • Scheduled Caste Sub-Plan: ₹25,37,000 crore

  • Tribal Sub-Plan: ₹12,82,000 crore

  • Children’s Budget: ₹63,135 crore

  • Gender Budget: ₹94,663 crore

  • Education: ₹47,224 crore

  • Women & Child Welfare: ₹34,929 crore

  • Health: ₹17,817 crore

  • Social Welfare: ₹18,612 crore

Major Announcements

  • Gram Panchayats renamed: All will be called Mahatma Gandhi Gram Panchayats to reinforce the Gram Swaraj vision.

  • Scholarship for girls: ₹30,000 for higher education after government schools/colleges.

  • Adivasi Development Corporation & Scheduled Tribes Commission to be set up.

  • Strict anti-drug measures: Drugs will be banned in schools, colleges, and universities.

  • Student mental health: Mental health counselors to be appointed at Block Resource Centres.

  • New schemes for minorities, social welfare, and rural development.

Economic Performance & Revenue Concerns

Siddaramaiah highlighted Karnataka’s robust GSDP growth of 8.1% in 2025-26, surpassing the expected national GDP growth of 7.4%. Sector-wise growth included:

  • Agriculture: 9.1%

  • Industry: 6.7%

  • Services: 8.1%

However, he noted the financial strain due to GST rationalisation, which reduced the state’s average monthly GST collection from 10% growth to just 4%, causing an estimated shortfall of ₹10,000 crore in 2025-26 and ₹15,000 crore in 2026-27.

The CM also raised concerns about the reduced share under the 15th Finance Commission (3.6% instead of 4.7%), delayed special grants (₹5,495 crore), and state-centric grants (₹6,000 crore), calling for compensation and remedies under the 16th Finance Commission.

 

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Focus on Social Welfare, Education & Technology

The budget also prioritises child development, gender equity, education, and technology integration, with significant allocations for:

  • Student support through scholarships and career counselling

  • Strengthening mental health services in schools

  • Initiatives for women’s empowerment and minority welfare

Infrastructure & Urban Development

  • Upgrades to Bengaluru Outer Ring Road (ORR) and other urban transport infrastructure

  • Promotion of regional and rural development through targeted sub-plans

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