Bengaluru, March 6: Karnataka Chief Minister Siddaramaiah announced on Thursday that the 2026-27 State Budget ensures a balance between welfare commitments and fiscal discipline, while criticizing the Central Government for its inadequate funding to Karnataka.
At a press conference held at his official residence, Krishna, Siddaramaiah highlighted how the Centre’s policies and GST rationalization have adversely impacted the state’s revenue, estimating a loss of approximately ₹10,000 crore, which could rise to ₹15,000 crore next year due to changes in GST revenue patterns. He reaffirmed that Karnataka remains the second-highest GST contributor in India, trailing only Maharashtra.
Despite fiscal challenges, Siddaramaiah noted that Karnataka’s Gross State Domestic Product (GSDP) growth rate for 2025-26 is projected at 8.1%, outpacing the national GDP growth of 7.4%. The government has set aside ₹52,000 crore for guarantee schemes and has allocated ₹1,21,591 crore to fulfill commitments made to citizens.
Siddaramaiah criticized the Central Government’s insufficient contribution to the Jal Jeevan Mission, where the Centre’s share should be ₹30,880 crore for a total project cost of ₹69,488 crore. Karnataka has only received ₹11,786 crore, resulting in a significant financial burden on the state, which has already spent ₹38,600 crore on this initiative, incurring an additional ₹15,500 crore.
Responding to opposition critiques concerning state borrowings, the Chief Minister asserted that development invariably requires borrowing if it remains within permissible limits. He pointed out that India’s national debt surged from ₹53.11 lakh crore before 2014 to ₹165 lakh crore under Prime Minister Narendra Modi’s administration.
Additionally, Siddaramaiah expressed disapproval of the VBG-Ramji Act, stating that it undermines the MGNREGA scheme by shifting more financial obligations to the states, projecting an added burden of around ₹3,000 crore on Karnataka. He urged the Centre to retract the law and revert to the previous funding arrangement for MGNREGA.
In a significant announcement, the government will fill 56,432 vacant government posts this year, with an extension of the age limit by five years for eligible candidates to address delays in recruitment processes.
The Cabinet has adopted the Prof. M. Govinda Rao Committee’s suggestions aimed at mitigating regional disparities, allocating ₹4,291 crore for implementation in phases. Under the Kalyana Karnataka Regional Development Board, the Chief Minister revealed development projects worth ₹5,000 crore are proposed, with ₹4,000 crore already expended this financial year.
Siddaramaiah confirmed that the Karnataka government will provide compensation to farmers affected by the Krishna Upper Stage Project Phase-III, offering ₹30 lakh per acre for dry land and ₹40 lakh per acre for irrigated land, with a completion timeline of four years. He also stated that all damaged gates of the Tungabhadra reservoir will be replaced by June, ensuring rigorous supervision to guarantee quality execution.
The press conference was attended by Political Secretary to the Chief Minister Naseer Ahmed, Economic Advisor Basavaraj Rayareddy, Legal Advisor A.S. Ponnanna, Ministers Byrathi Suresh and Dr. M.C. Sudhakar, Principal Secretary of Finance Ritesh Kumar Singh, and other senior officials.
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