Karnataka Chief Minister Siddaramaiah is set to present his record-extending 17th state budget Friday amid rising administrative costs, pressure to fund the guarantee schemes along with development projects.
Compared with his first budget of approximately Rs 12,600 crore presented in 1995, when he served as Finance Minister, his 17th budget is expected to surpass Rs 4 lakh crore, for the second time in a row. The Congress government is facing concerns about a revenue shortfall due to the Goods and Services Tax (GST) rationalisation implemented in September 2025. It is apprehensive that this could result in losses of Rs 12,000 to Rs 15,000 crore annually.
State government commitments for expenditure, particularly on salaries and interest payments, are projected to increase significantly. Recently, the state government announced plans to fill 56,432 vacant government positions.
The budget allocation for the five flagship guarantee schemes—Gruha Lakshmi, Gruha Jyothi, Shakti, Anna Bhagya, and Yuva Nidhi—was Rs 51,034 crore last year. Deputy Chief Minister D K Shivakumar recently stated that, although these schemes are considered a ‘burden,’ they will be continued.
The government is also under pressure from ruling Congress legislators who continue to demand funds for development projects in their constituencies, warning that relying solely on guarantee schemes will not suffice for the party in the long run.
The 2026-27 fiscal year marks a massive shift in rural employment policy. The Centre has moved to scrap the Mahatma Gandhi National Rural Employment Guarantee Scheme (NREGS) and replace it with the Viksit Bharath Guarantee for Rozgar and Ajeevika Mission (Gramin) [VB-G RAM G] scheme. Karnataka has opposed the move, fearing it will have to bear a much larger share of the cost of the new scheme.
The Opposition BJP has criticised the government for the increase in the state’s debt, which, according to the 2025-26 budget, stands at Rs lakh crore. However, the government maintains that this debt represents only 24.91 per cent of Karnataka’s Gross State Domestic Product (GSDP) and is within the limits set by the Karnataka Fiscal Responsibility Act.
