Bengaluru, March 7, 2025: Karnataka Chief Minister Siddaramaiah presented his 16th budget on Friday, strongly defending his government’s five guarantee schemes while holding the Union government responsible for the state’s fiscal difficulties.

Despite facing criticism, Siddaramaiah emphasized that the budget was “development-oriented”, with a total expenditure of ₹4,09,549 crore for the 2025-26 financial year.

Budget Highlights:
Total expenditure: ₹4,09,549 crore
Revenue expenditure: ₹3,11,739 crore
Capital expenditure: ₹71,336 crore
Loan repayment: ₹26,474 crore

‘Welfare Schemes Are Strategic Investments, Not Freebies’: Siddaramaiah

Defending Karnataka’s five guarantee schemes, Siddaramaiah stressed that these initiatives were not just handouts, but strategic investments aimed at economic and social growth.

"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 budget focuses on six key development areas:
Welfare Programmes
Agriculture & Rural Development
Development-Oriented Projects
Urban Development
Investment & Job Creation
Governance Reforms

Additionally, the government will prioritize reducing regional disparities, strengthening education and healthcare, improving transportation, and maintaining law and order.

‘Centre’s Policies Have Hurt Karnataka’s Finances’

Siddaramaiah blamed the Union government for Karnataka’s fiscal struggles, citing:
Unpaid GST revenue compensation
Non-devolution of cesses & surcharges
Lower-than-expected tax devolution from the Fifteenth Finance Commission

“As a result, Karnataka has been facing revenue challenges in its pursuit of long-term growth with social justice,” the CM stated.

The state has urged the 16th Finance Commission to increase Karnataka’s share in tax devolution, emphasizing the need for a fairer balance between equity and growth in fiscal federalism.

"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 added.

₹51,034 Crore Allocated for Welfare Guarantees

₹51,034 crore has been allocated to fund the state’s five guarantee schemes in the current fiscal year.
The CM emphasized that Karnataka managed to stay within the fiscal deficit norm of 3% of GSDP and a debt-to-GSDP ratio of 25% over the past two budgets.

New ₹8,000 Crore Infrastructure Plan Announced

Siddaramaiah announced a new initiative, the Chief Minister’s Infrastructure Development Programme (CMIDP), with an investment of ₹8,000 crore.

Key Focus Areas:
Minor irrigation projects
Road development
Urban infrastructure improvement

The programme aims to ensure balanced development across Karnataka, benefiting all Legislative Assembly constituencies.

Fiscal Deficit & Liabilities Under Control

Key Fiscal Metrics for 2025-26:
Revenue Deficit: ₹19,262 crore (0.63% of GSDP)
Fiscal Deficit: ₹90,428 crore (2.95% of GSDP)
Total Liabilities: ₹7,64,655 crore (24.91% of GSDP)

“By keeping the fiscal deficit and total outstanding liabilities within the limits mandated under the Karnataka Fiscal Responsibility Act, we have maintained fiscal discipline,” Siddaramaiah assured.

A Balance Between Welfare & Fiscal Prudence

Siddaramaiah’s 2025-26 budget attempts to balance welfare spending with development priorities, while also holding the Union government accountable for Karnataka’s revenue challenges.

With a strong focus on infrastructure, governance reforms, and economic development, the CM aims to maintain fiscal discipline while continuing social welfare initiatives.

As Karnataka pushes for a fairer share of central funds, the success of this budget will depend on efficient implementation and economic growth in the coming months.