Siddaramaiah’s budget training turns into defence of state finances

Bengaluru: Chief minister Siddaramaiah took on the role of a teacher at a workshop Monday to explain nuances of state budgets to legislators, but the session largely turned into a defence of his record 17th state budget presented last week, with the CM highlighting the state's fiscal management while accusing the Centre of not releasing funds. As expected, opposition MLAs — barring two BJP rebels — skipped the event, while about 80% of governing Congress legislators attended. Several legislators raised questions related to the recent budget rather than its technical aspects.
Siddaramaiah defended Karnataka's fiscal management and said the state had been forced to present a deficit budget because funds due from the central govt did not arrive. He admitted that while the size of the 2026-27 state budget rose to Rs 4.48 lakh crore, the govt could not fully implement last year's proposed expenditure. "We were forced to present a deficit because funds from the Centre did not arrive," he said. He said the introduction of the GST had slowed growth of state tax revenues. "Before GST, our tax revenue grew by 10% every year. After GST, it dropped to 4%," he said. Referring to Fiscal Responsibility and Budget Management Act norms, he said finances were considered sound if a state maintained a revenue surplus, kept fiscal deficit within 3% and limited debt to 25% of GSDP. He said Karnataka's GSDP is about Rs 33.5 lakh crore. Responding to criticism on rising debt, Siddaramaiah said: "These days, the opposition often alleges that Siddaramaiah has taken excessive loans and that the state is running on debt… But I have strived to maintain financial discipline." He said Karnataka had a revenue surplus until 2018 but faced a deficit after GST compensation from the Centre ended in 2022. "For 2025-26, the revenue deficit was around Rs 19,000 crore, and for next year it is expected to be around Rs 22,000 crore. If funds due from the Centre were released, this deficit could have been eliminated." Citing the Jal Jeevan Mission, Siddaramaiah said the estimated cost of the scheme was Rs 69,000 crore with a 50:50 funding. "So far, the Centre has paid only Rs 11,000 crore, while we have already spent more than Rs 27,000 crore. Essentially, we have borne the Centre's share," he said. He added: "Karnataka contributes over Rs 4.5 lakh crore in taxes to the Centre but the share to the state is only around Rs 73,000 crore. This means that for every Re 1 Karnataka contributes, only about 15 paise comes back to the state, while 85 paise remains with the Centre. This is not a political statement; several states face similar injustice."