The ₹4.49 lakh crore budget for 2026–27, about 10 per cent higher than the previous year, attempts to strike a balance between the Congress government’s welfare commitments and large-scale infrastructure investments. Opening his three-and-a-half-hour budget speech, Siddaramaiah said the budget was dedicated to farmers, women, youth, backward classes and minorities, reiterating the government’s focus on social welfare.
For 2026–27, total revenue receipts are estimated at ₹3,15,050 crore, including ₹2,20,000 crore from the State’s own tax revenue, ₹16,000 crore from non-tax revenue, and ₹79,050 crore as transfers from the Union government. Including gross borrowings of ₹1,32,000 crore and non-debt capital receipts of ₹190 crore, total receipts are estimated at ₹4,47,240 crore.
The State has projected total expenditure of ₹4,48,004 crore, comprising ₹3,38,007 crore in revenue expenditure, ₹74,682 crore in capital expenditure, and ₹35,316 crore towards loan repayments. The budget estimates a revenue deficit of ₹22,957 crore and a fiscal deficit of ₹97,449 crore, equivalent to 2.95 per cent of the State’s Gross State Domestic Product (GSDP). Total liabilities by the end of the fiscal year are projected to reach ₹8,24,389 crore, or 24.94 per cent of GSDP.
A substantial portion of spending continues to be directed toward the Congress government’s flagship guarantee schemes. The Gruha Lakshmi scheme has been allocated ₹34,243.39 crore, while Gruha Jyothi has received ₹10,578 crore. The Annabhagya food security programme is set to receive ₹6,200 crore, and Shakti, which provides free bus travel for women, has been allocated ₹5,300 crore. The Yuvanidhi unemployment assistance scheme has been allocated ₹718.18 crore.
major infrastructure projects
Alongside welfare spending, the government has outlined a series of major infrastructure projects, particularly for Bengaluru. A 40-km underground tunnel road network, estimated to cost ₹40,000 crore, has been approved to address the city’s worsening traffic congestion. In north Bengaluru, the Hebbal–Mekhri corridor project, involving tunnel and elevated road infrastructure, is expected to cost ₹2,250 crore.
The government also plans to upgrade the Outer Ring Road stretch from Silk Board Junction to K R Puram Metro Station at a cost of ₹450 crore, while a 9-km elevated pedestrian walkway along the metro viaduct on the ORR will be built for ₹160 crore. Metro expansion will add 41 km of new lines, potentially increasing daily ridership to 15 lakh commuters. In addition, the Cauvery Stage-6 water supply project, estimated at ₹6,939 crore, aims to bring an additional 6 TMC of water to Bengaluru.
Beyond the capital, Siddaramaiah said the government intends to develop Mysuru as a second IT hub to complement Bengaluru, in a bid to ease pressure on the state’s technology capital. A ₹500 crore film city is also planned in Mysuru. To support long-term urban growth, the government will implement a Revised Master Plan (RMP) 2041 for Bengaluru by the end of 2027 and prepare a comprehensive mobility plan within the next six months.
However, the budget presentation also triggered political sparring. Siddaramaiah accused the Centre of discriminating against Karnataka in fund allocation, noting that the state has borne over 88 per cent of the total ₹67,460 crore cost of the Namma Metro, while the Centre contributed only about 12 per cent. The remark drew strong objections from opposition BJP members in the Assembly.
Former Karnataka Chief Minister Basavaraj Bommai criticised the fiscal projections, arguing that the government had pushed the fiscal deficit close to the 3 per cent GSDP limit and may have excluded certain borrowings. With committed expenditure, subsidies, and guarantee schemes consuming a large portion of the budget, Bommai questioned how much fiscal space remains for development spending.
Tax collection
Leader of the Opposition in the Legislative Council Chalavadi Narayanaswamy pointed out that tax collection declined by 7 per cent in 2025–26. He accused the government of manipulating figures in the budget estimates. According to him, the State’s share in central taxes was estimated at ₹51,877 crore in 2025–26, but the revised estimate stood at ₹50,802 crore, reflecting a shortfall of ₹1,075 crore, or about 2 per cent .
Union Minister H D Kumaraswamy and JDS leader also sharply criticised the Karnataka Budget, alleging that the State government has turned into a “feeding centre for Congress workers”. Kumaraswamy questioned how the government is utilising borrowed funds. “If the State is taking loans, they should ideally be used for capital expenditure. However, capital spending has remained stagnant over the past three years,” he said.
He alleged that the government is borrowing heavily while increasing unproductive expenditure, including granting cabinet and minister-of-state rank to more than 140 Congress leaders. According to him, funds are being wasted on such expenses and the government has effectively become a “gruel centre for Congress workers”, with borrowed money allegedly ending up in their pockets.
Siddaramaiah concluded his marathon address by commending the 2026–27 budget for the House’s approval.
Total expenditure for 2026–27- ₹ 4,48,004 crore
Gross borrowings- ₹ 1,32,000 crore
Total Revenue receipts- ₹3,15,050 crore
Total liabilities- ₹ 8,24,389 crore
Published on March 6, 2026