Karnataka Chief Minister Siddaramaiah.
Credit: DH Photo/S K Dinesh
Bengaluru: Chief Minister Siddaramaiah has picked Harvard alumnus Ritesh Kumar Singh to head the finance department ahead of the 2025-26 Budget, which may cap expenditure on the flagship 'guarantee' schemes to create room for infrastructure spending, including outlays for Bengaluru.
The size of the 2025-26 Budget, which Siddaramaiah plans to present in March in what will be his record 16th outing as the finance minister, is expected to touch Rs 4 lakh crore, up from Rs 3.71 lakh crore in the current fiscal.
Siddaramaiah, who is under pressure to defray the expenses of infrastructure development, may keep expenditure on the 'guarantee' schemes unchanged at around Rs 52,000 crore, which is the outlay for the current fiscal. This effectively means that new beneficiaries may not get added to the schemes.
"As a proportion of the budget, the outgo on the 'guarantee' schemes will come down. Hence, we will get more space," a source explained.
The room thus created will be used to pump more money on infrastructure creation, it is said.
Capital expenditure on Bengaluru is expected to figure in the upcoming budget with allocations for the city's suburban rail project, Namma Metro and the ambitious tunnel road idea. "We are also planning double-decker flyovers all along the Metro," the source added.
However, Siddaramaiah will have to factor in growth in salaries and other committed expenditure such as interest payments. "We want to limit other revenue expenditure through more rationalisation measures," the source said.
This is where Singh, the incoming principal secretary of the finance department, will have to do some heavy lifting. The 1996-batch IAS officer, who holds a Harvard postgraduate degree in public administration, was earlier a senior adviser at the World Bank. He was also joint secretary in the ministry of environment, forest & climate change.
Completing irrigation and road projects while focusing on the healthcare and education sectors are on Siddaramaiah's mind for the 2025-26 Budget, sources said.
The finance department is also working out the government's outlook on borrowings for the 2025-26 fiscal. In the current 2024-25 fiscal, Karnataka has estimated total borrowings of Rs 1.05 lakh crore. In 2023-24, the state borrowed Rs 90,280 crore.
Apparently, the state can borrow more according to the 15th Finance Commission guidelines. But that would take fiscal deficit beyond 3% of the GSDP, violating the Karnataka Fiscal Responsibility Act. "Siddaramaiah doesn't want that in his legacy," the source said.