Bengaluru: Karnataka Chief Minister Siddaramaiah presented his third consecutive revenue deficit budget Friday, which emphasises his growing challenges of grappling between growth, guarantees and piling financial liabilities.
The revenue deficit is estimated at Rs 22,957 crore in 2026-27, steadily climbing from Rs 19,262 crore in the corresponding fiscal.Reduced capital inflows from the Centre and other estimated losses have compounded the challenges, Siddaramaiah said.
He, however, added that within these constraints on revenue availability, the “the state has carefully prioritised its expenditure to balance growth, welfare and fiscal discipline”.
The southern state barely managed to remain within the fiscal responsibility parameters even though borrowings have gone up in recent years.
The government is estimated to borrow Rs 1,32,000 crore, up from Rs 1,16,000 crore.
“The fiscal deficit is estimated at Rs 99,449 crore, which is 2.95 percent of GSDP, and total liabilities at the end of the year are estimated at Rs 8,24,389 crore, amounting to 24.94 percent of GSDP,” according to the budget.
Siddaramaiah managed to maintain fiscal discipline as the size of the budget went up from Rs 4,09,549 crore in 2025-26 to Rs 4,48,004 crore in 2026-27. However, the revised estimates for total expenditure were downward revised to Rs 3,95,307 crore.
The state government has set aside Rs 35,316 crore only for loan repayment.
Despite constraints, the Siddaramaiah-led Congress government continued to keep its focus on funding the five guarantees.
The government has, so far, spent Rs 1,21,598 crore to fund the five guarantees, with around Rs 52,000 crore allocated for this fiscal.
The Gruha Lakshmi scheme will cost Rs 28,608 crore, while the Gruha Jyothi will run into Rs 10,578 crore. The Yuva Nidhi is estimated to cost Rs 913 crore, while the Anna Bhagya will cost Rs 6,200 crore. The free bus rides for women scheme, Shakthi, is estimated to cost Rs 5,300 crore.
Though the Karnataka government has tried to rationalise the guarantees by extending it only to the needy, the Congress has been cautious in its approach not to upset any section especially with upcoming elections in urban and rural bodies.
It has set aside Rs 74,682 crore for capital expenditure as against Rs 92,456 crore (including loan repayments) in its 2025-26 revised estimates. Despite the constraints, the government has set aside Rs 40,000 crore for the controversial tunnel road.
(Edited by Tony Rai)
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