BENGALURU: Chief Minister Siddaramaiah, who also holds the Finance portfolio, presented a Rs 19,262 crore revenue-deficit Karnataka Budget for 2025-26 here on Friday, March 7, with a total outlay pegged at Rs 4,09,549 crore as against the revised estimate of Rs 3,65,865 crore for 2024-25.
Apparently, the CM did a tightrope walk with not many options of resources mobilising. He has struck a balance between implementing the social welfare schemes and the development. Though it showed commitment to implement the five guarantees, the allocation saw a stagnation as it has come down slightly from Rs 52,000 crore in 2024-25 to Rs 51,034 crore.
"Karnataka is one of the fastest-growing states in India contributing 8.4% to the National Gross Domestic Product (GDP). It has continued its impressive growth trajectory in the year 2024-25 and is poised to achieve a GSDP growth rate of 7.4%, outpacing the national growth rate of 6.4%", he stressed.
In an attempt to appease the legislators from both the ruling congress and the opposition parties who were complaining that the guarantees were eating away the development, Siddaramaiah launched a new scheme called CM's Infrastructure Development Programme (CMIDP) with Rs 8,000 crore.
It is to ensure balanced development across the state focusing on minor irrigation, roads, and urban infrastructure in all the 224 assembly constituencies.
The CM also announced various schemes for the welfare of the minorities. Besides, announced additional grants for the projects for IT capital Bengaluru's development including for the expansion of Metro rail project upto Devanahalli, the Bengaluru International Airport.
The budget for 2025-26 includes revenue expenditure of Rs 3,11,739 crore, capital expenditure of Rs 71,336 crore and loan repayment of Rs 26,474 crore.
Siddaramaiah created a history of sorts by presenting his 16th budget, debuting in 1994 as DCM in the Janata Dal regime. As CM of the state for the second term it's his third budget and second consecutive revenue deficit budget.
In 2024-25, he had presented a Rs 27,354 revenue deficit budget with an outlay pegged at Rs 3,71,383 crore. Which means the outlay for 2025-26 has a conventional 10.27 per cent jump adding Rs 38,166 crore more.
There is no much increase in the borrowings too as CM proposed Rs 1,16,000 crore for the fiscal year compared to Rs 1,05,246 crore during 2024-25.
Total Revenue Receipts of Rs 2,92,477 crores is estimated for 2025-26, Rs 3,58,657 crore. It includes its own tax revenue of Rs 2,08,100 crore, non-tax revenue of Rs 16,500 crore and Government of India receipts of Rs 67,877 crore. In addition to these revenue receipts, gross borrowings of Rs 1,16,000 crore, non-debt capital receipts of Rs 170 crore is estimated for 2025-26.
Total receipts estimated in the budget for 2025-26 is Rs 4,08,647 crore. Total Expenditure for 2025-26 is estimated to be Rs 4,09,549 crore which includes revenue expenditure of Rs 3,11,739 crore, capital expenditure of Rs 71,336 crore and loan repayment of Rs 26,474 crore.
Revenue deficit is estimated to be Rs 19,262 crore, which is 0.63 % of GSDP. Fiscal Deficit is estimated to be Rs 90,428 crore, which is 2.95% of GSDP. Total liabilities at the end of 2025-26 is estimated to be Rs 7,64,655 crore, which is 24.91 % of GSDP.
"By keeping fiscal deficit and total outstanding liabilities within the limits mandated under Karnataka Fiscal Responsibility Act, we have maintained fiscal discipline in the financial year 2025-26", Siddaramaiah claimed.
The revised estimates for 2024-25:
A total receipt of Rs 3,58,657 crore has been estimated in 2024-25 revised estimates. Revenue Receipts are estimated at Rs 2,57,801 crore. The revenue receipts include State own tax revenue of Rs 1,80,368 crore, non-tax revenue of Rs 14,500 crore and receipts from Government of India of Rs 62,933 crores from the Centre.
In 2024-25 expenditure revised estimates, total is estimated to be Rs 3,65,865 crore. It includes revenue expenditure of Rs 2,83,928 crore and Rs 81,937 crore for capital expenditure including loan repayment.
Tax proposals:
For the fiscal 2025-26 a revenue target of Rs 1,20,000 crore is set for the commercial tax department as against the revised estimate of Rs 1,05,000 crore. It is proposed to make suitable amendment to the professional tax payable by salary and wages earners from Rs 200 to Rs 300 for the month of February to align with the maximum limit permissible of Rs 2,500 per annum.
A revenue collection target of Rs 40,000 crore is set for 2025-26 against the revised estimate of Rs 36,500 crore for 2024-25.
Revenue target for stamps and registration department for 2025-26 is Rs 28,000 crore against Rs 24,000 crore revised estimate for 2024-25.
For the transport department Rs 15,000 crore is the target for 2025-26 as against the revised estimate Rs 12,500 crore for 2024-25.
The royalty collection in the mines and geology department is estimated at Rs 9,000 crore as against the revenue collection of Rs 7,250 for 2024-25.
"I am presenting a budget, focusing on sustainable economic growth while ensuring fiscal consolidation. By prioritising key sectors such as infrastructure, irrigation and social welfare, we are laying the foundation for long-term prosperity," the CM said.
He added, "At the same time, the fiscal discipline we have outlined will ensure stability and strengthen the financial position of the State. As we move forward, this budget will not only foster growth but also secure a strong fiscal health of the State."
"I ask for the support of every member of this House in order to carry out the plans outlined in this budget into action. I am confident that with all your support, we can collectively lead the State towards progress," Siddaramaiah concluded his parting shot.
CM takes dig at Centre:
But he took a dig at the Centre as there was a decline in the state's share of tax devolution in the divisible pool as it has been reduced to 3.647 per cent in 15th FC compared to 4.713 per cent in 14th FC. This is a decline of 23 percent in devolution, causing an estimated loss of Rs 12,000 crore per year, he said.
The 15th Finance Commission had recommended a special grant of Rs. 5,495 crore to State for reduction in the state's share in devolution, along with a special grant of Rs. 3,000 crore for lake development in Bengaluru and Rs. 3,000 crore for the development of the Peripheral Ring Road, totalling to Rs. 11,495 crore in its report.
"But the Central Government has not released any of these grants to the State. Further, in the Union Budget for the year 2023-24, Rs. 5,300 crore was announced for the Upper Bhadra Irrigation Project. However, the Central Government has not released any grant so far", CM alleged.
