Karnataka Budget: Siddaramaiah defends guarantee schemes, targets Centre for state's fiscal challenges

Bengaluru: Karnataka Chief Minister Siddaramaiah, presenting his record sixteenth budget on Friday, strongly defended the government's five guarantee schemes and targeted the union government for the state's fiscal challenges.

He also tried to emphasise that the budget was "development-oriented".

The total expenditure for the 2025-26 budget is estimated to be Rs 4,09,549 crore. It includes revenue expenditure of Rs 3,11,739 crore, capital expenditure of Rs 71,336 crore and loan repayment of Rs 26,474 crore.

The chief minister presented the budget in the Assembly sitting due to knee pain, which he has been suffering for some time now.

The government has the responsibility to ensure that available resources are accessible to everyone, by balancing economic development with people's welfare. The administration was shaping Karnataka's development model through the concept of "Universal Basic Income", said Siddaramaiah.

"Many of the welfare programmes we offer, including the five guarantees, are not merely freebies; I can confidently say that these are strategic investments made on economic and social principles," he said.

The chief minister noted that this year's budget will focus on implementing programmes across six key developmental dimensions: Welfare Programmes Budget, Agriculture and Rural Development Budget, Development-Oriented Budget, Prioritizing Urban Development, Investment and Job Creation and Governance Reforms.

"In addition to these initiatives, we will prioritise new strategies to eliminate regional disparities, strengthen education and health sectors, ensure an efficient transport system, and maintenance of law and order. This budget emphasises on empowering the helpless through welfare departments," he said.

Pointing out that Karnataka is noted for its prudent fiscal policy, debt management and adherence to fiscal discipline, the CM said it is also the first state in the country to incorporate off-budget borrowings into total liabilities. However, the union government's failure to fully compensate for GST revenue loss, non-devolution of cesses and surcharges and lower tax devolution from the Fifteenth Finance Commission compounded the state's fiscal challenges, he said.

"As a result, Karnataka has been facing revenue challenges in its pursuit of long-term growth with social justice," he added.

The state has made a strong argument before the 16th Finance Commission for an increase in share in tax devolution. Karnataka has impressed upon the commission to strike a judicious balance between the twin considerations of equity and growth from the viewpoint of evolving a harmonious and healthy fiscal federalism, the CM said.

"While economically advanced states are committed to supporting poorer states, it should not be at the expense of their own residents or economic efficiency," he said.

The CM said he has allocated a budget of Rs 51,034 crore for guarantees in the current financial year. It should be noted that we managed the guarantees within the prudent fiscal deficit norm of 3 per cent of GSDP and debt-GSDP ratio of 25 per cent for the last two budgets, he said.

He also announced a new scheme called the Chief Minister's Infrastructure Development Programme (CMIDP) being launched with Rs 8,000 crore investment to ensure balanced development across the state, focusing on minor irrigation, roads and urban infrastructure in all legislative assembly constituencies of the state.

According to the Budget, for the financial year 2025-26, revenue deficit is estimated to be Rs 19,262 crore, which is 0.63 per cent of GSDP (Gross State Domestic Product).

Fiscal deficit is estimated to be Rs 90,428 crore, which is 2.95 per cent of GSDP. Total liabilities at the end of 2025-26 is estimated to be Rs 7,64,655 crore, which is 24.91 per cent of GSDP.

"By keeping fiscal deficit and total outstanding liabilities within the limits mandated under the Karnataka Fiscal Responsibility Act, we have maintained fiscal discipline in the financial year 2025-26," the CM said.