<p>Bengaluru: Facing a revenue shortfall amid rising expenditure commitments, Chief Minister Siddaramaiah will have to overcome severe fiscal limitations in the 2026-27 Budget, which he is slated to present this Friday. </p>.<p>This will be Siddaramaiah’s record 17th outgoing as the finance minister. </p>.<p>In 2025-26, the government estimated a total expenditure of Rs 4.09 lakh crore. This may be lowered to about Rs 3.9 lakh crore. </p>.<p>According to the chief minister’s economic advisor Basavaraj Rayareddi, the government is likely to end up with a revenue shortfall of Rs 18,000 crore in the current fiscal.He blamed this on the GST rate rationalisation in September last year. “States should’ve been compensated for this,” he said. </p>.<p>It is inevitable for Siddaramaiah to look at resource mobilisation measures. But the options are limited, Rayareddi said. “We’ve exhausted our tax mobilisation. How much more can people pay?” he said. “We’re looking at what else we can do with excise revenue.” </p>.Union Budget 2026: Karnataka's tax share rises to 4.13%, gets Rs 63,049 crore.<p>Excise has been the government’s best-performing revenue front. Against the target of Rs 40,000 crore, the government collected Rs 33,370.54 crore, or 83.4%, up to January. </p>.<p>On Tuesday, the government gave one indication of resource mobilisation by creating a new post: secretary (mines). Authorities expect to mop-up an additional Rs 3,000-4,000 crore from the mining sector in the next fiscal. Commercial Taxes commissioner Vipul Bansal has been given concurrent charge of the new post. </p>.<p>Burdens</p>.<p>Siddaramaiah will have to provide for the flagship ‘guarantee’ schemes. In 2025-26, the government has allocated Rs 51,034 crore for the guarantees. There are calls to trim the outlay on the ‘guarantee’ schemes. </p>.<p>In addition to this, Siddaramaiah will have to factor in the government’s commitment to fill up 56,432 posts, which will add to the ballooning salary costs - from Rs 61,498 crore in 2023-24 to an estimated Rs 85,860 crore this fiscal. </p>.<p>Devolution</p>.<p>In 2026-27, Karnataka will receive Rs 63,049.58 crore as its share in taxes.</p>.<p>This is higher than Rs 50,000 crore that the state will receive under devolution in the current fiscal.</p>.<p>“We’re also expecting the state’s tax collection to rise by Rs 25,000 crore,” Rayareddi said.</p>.<p>Liabilities pegged at Rs 8.14L cr </p><p>The Reserve Bank of India has pegged the outstanding liabilities of Karnataka at Rs 8.14 lakh crore. This will be 26.5% of the state’s GSDP violating the permissible limit of 25%. The government’s Medium Term Fiscal Plan had estimated outstanding liabilities of Rs 7.64 lakh crore which is 24.91% of GSDP. </p>
<p>Bengaluru: Facing a revenue shortfall amid rising expenditure commitments, Chief Minister Siddaramaiah will have to overcome severe fiscal limitations in the 2026-27 Budget, which he is slated to present this Friday. </p>.<p>This will be Siddaramaiah’s record 17th outgoing as the finance minister. </p>.<p>In 2025-26, the government estimated a total expenditure of Rs 4.09 lakh crore. This may be lowered to about Rs 3.9 lakh crore. </p>.<p>According to the chief minister’s economic advisor Basavaraj Rayareddi, the government is likely to end up with a revenue shortfall of Rs 18,000 crore in the current fiscal.He blamed this on the GST rate rationalisation in September last year. “States should’ve been compensated for this,” he said. </p>.<p>It is inevitable for Siddaramaiah to look at resource mobilisation measures. But the options are limited, Rayareddi said. “We’ve exhausted our tax mobilisation. How much more can people pay?” he said. “We’re looking at what else we can do with excise revenue.” </p>.Union Budget 2026: Karnataka's tax share rises to 4.13%, gets Rs 63,049 crore.<p>Excise has been the government’s best-performing revenue front. Against the target of Rs 40,000 crore, the government collected Rs 33,370.54 crore, or 83.4%, up to January. </p>.<p>On Tuesday, the government gave one indication of resource mobilisation by creating a new post: secretary (mines). Authorities expect to mop-up an additional Rs 3,000-4,000 crore from the mining sector in the next fiscal. Commercial Taxes commissioner Vipul Bansal has been given concurrent charge of the new post. </p>.<p>Burdens</p>.<p>Siddaramaiah will have to provide for the flagship ‘guarantee’ schemes. In 2025-26, the government has allocated Rs 51,034 crore for the guarantees. There are calls to trim the outlay on the ‘guarantee’ schemes. </p>.<p>In addition to this, Siddaramaiah will have to factor in the government’s commitment to fill up 56,432 posts, which will add to the ballooning salary costs - from Rs 61,498 crore in 2023-24 to an estimated Rs 85,860 crore this fiscal. </p>.<p>Devolution</p>.<p>In 2026-27, Karnataka will receive Rs 63,049.58 crore as its share in taxes.</p>.<p>This is higher than Rs 50,000 crore that the state will receive under devolution in the current fiscal.</p>.<p>“We’re also expecting the state’s tax collection to rise by Rs 25,000 crore,” Rayareddi said.</p>.<p>Liabilities pegged at Rs 8.14L cr </p><p>The Reserve Bank of India has pegged the outstanding liabilities of Karnataka at Rs 8.14 lakh crore. This will be 26.5% of the state’s GSDP violating the permissible limit of 25%. The government’s Medium Term Fiscal Plan had estimated outstanding liabilities of Rs 7.64 lakh crore which is 24.91% of GSDP. </p>
