Karnataka CM Siddarmaiah Presented Rs 4.09 Lakh Crore Budget for FY26

In March 2025, the Chief Minister (CM) of Karnataka Siddaramaiah presented his 16th budget worth Rs 4.09 lakh crore(Rs 4,09,549 crore) for Financial Year 2025-26(FY26) at the Karnataka Legislative Assembly in Bengaluru, Karnataka. The budget outlay for FY26 marked an increase of 12% i.e. Rs 3.65 lakh crore in Revised Estimates (RE) for FY25.

• The budget for FY26 will focus on implementing programmes across 6 key developmental fields: welfare programmes budget, agriculture and rural development budget, development-oriented budget, prioritizing urban development, investment and job creation and governance reforms.
• The budget has allocated Rs 51,034 crore for the state government’s 5 guarantee schemes, a decrease from Rs 56,000 crore allocated for the scheme in FY25.

Key Financial Indicators:

The state government has managed these guarantees while maintaining the  fiscal deficit to 3% of Gross State Domestic Product (GSDP) and debt-to-GSDP ratio of 25% over the last two budgets.

i.Total total receipts are estimated at Rs 4,08,647 crore for FY26 (marking an increase of 13.9% compared to Revised Estimate (RE) for FY25), of which revenue receipts are estimated at Rs 2,92,477 crore, including state’s tax revenue (Rs 2,08,100 crore), non-tax revenue (Rs 16,500 crore) and central government funds (Rs 67,877 crore).

• Additionally, the budget has made provision for gross borrowings of Rs 1,16,000 crore as per the Karnataka Fiscal Responsibility Act and non-debt capital receipts of Rs 170 crore.

ii.Total expenditure is estimated at Rs 4,09,549 crore for FY26, including revenue expenditure (Rs 3,11,739 crore), capital expenditure(CapEx) (Rs 71,336 crore), and loan repayment (Rs 26,474 crore).

iii.Revenue deficit is estimated to be Rs 19,262 crore, which accounts 0.63% of GSDP, for FY26 while, Fiscal Deficit(FD) is estimated to be Rs 90,428 crore (which accounts 2.95% of GSDP).

• The budget has estimated total liabilities at Rs 7, 64,655 crore (which is 24.91% of GSDP) at the end of FY26.

iv.Karnataka remains to be a major contributor to India’s Gross Domestic Product (GDP) representing 8.4% of India’s GDP. The state’s GDP is projected to grow at 7.4% in FY25.

Key Allocations:

i.Agriculture: The budget has allocated Rs 51,339 crore for the agriculture sector for FY26, compared to Rs 44,000 allocated in last fiscal year.

ii.Education: Rs 45,286 crore has been allocated for the education sector for FY26, which accounts 10% of the total budget outlay.

• Out of the total budget allocated for education, the government has allocated Rs 419 crore for subsidy and financial assistance (down from Rs 481 crore in FY25).
• During the budget, CM announced that the Government of Karnataka in partnership with Manila (the Philippines)-based Asian Development Bank (ADB) will develop 500 new Karnataka Public Schools (KPSes) at a cost of Rs 2,500 crore.
• Also, the state government in collaboration with Ek-Step foundation will launch Artificial Intelligence (AI)-based ‘Kalika Deepa’ programme, will help students in 2,000 schools to enable students to learn Kannada and English languages and acquire early mathematical competencies.

iii.Healthcare sector: The total budget allocation for the health sector for FY26 remains the same as last year i.e. Rs 17,473 crore, which accounts 4% of the total budget.

• The government has announced that a Kalyana Karnataka Comprehensive Health Scheme (KKCHS) will be launched with a total budget allocation of Rs 873 crore, to enhance healthcare services in the region.
• The government has also decided to extend the Gruha Arogya scheme to diagnose and treat 6 Non-communicable diseases (NCDs) currently being implement in Kolar district of the state at a cost of Rs 100 crore and also, Rs 50 crore has been allocated for a programme to control communicable diseases such as: dengue, chikungunya, and Kyasanur Forest Disease Kyasanur Forest Disease (KFD).
• Rs 320 crore has been allocated for the mission to reduce preventable maternal mortality to zero.

Key Announcements and Proposals:

i.The state government has proposed to amend the  Karnataka Tax on Profession, Trades, Callings and Employments (Amendment) Act, 2023. to increase the Professional Tax payable by salary and wages earners from Rs 200 to Rs 300 for February 2025 to align with the maximum limit permissible of Rs 2,500 annually.

ii.The state government  announced ‘Target-Olympic Medal’ scheme with a total budget outlay of Rs 6 crore.

• Under this scheme, 60 sports persons will be selected and provide financial assistance in the form of incentives to prepare for the 2028 Olympics.

iii.The state government has introduced a new industrial policy 2025-30, which aims to achieve 12% industrial growth and generate 20 lakh jobs by 2030.

iv.The government proposed to launch a new scheme named, ‘Chief Minister’s  Infrastructure Development Program (CMIDP)’ with a budget outlay of Rs 8,000 crore. The scheme will focus mainly on minor irrigation, roads and urban infrastructure in all legislative assembly constituencies of the state.

v.The government has earmarked Rs 1,800 crore for 21 projects under the Brand Bengaluru.

vi.Rs 62,033 crore has been allocated for children-centric programmes and Rs 94,084 crore for women-centric programmes.

About Karnataka:
Chief Minister (CM)- Siddaramaiah
Governor– Thawar Chand Gehlot
Capital- Bengaluru
National Parks (NPs)- Bandipur NP, Nagarhole NP