Fri Mar 07 07:02:55 UTC 2025: **Karnataka’s 2025-26 Budget Crosses ₹4 Lakh Crore, but Remains Revenue Deficit**

Bengaluru, March 7, 2025 – Karnataka unveiled its 2025-26 budget today, marking a significant milestone with a total outlay exceeding ₹4 lakh crore for the first time. Chief Minister Siddaramaiah presented the ₹4,09,549 crore budget, his 16th, however, it continues to reflect a revenue deficit, pegged at ₹19,262 crore, a decrease from the previous year’s ₹27,354 crore.

The budget allocates ₹3,11,739 crore for revenue expenditure, ₹71,336 crore for capital expenditure (a significant increase from ₹55,877 crore in 2024-25), and ₹26,474 crore for loan repayment. Total revenue receipts are estimated at ₹2,92,477 crore, comprising ₹2,08,100 crore in state tax revenues, ₹16,500 crore in non-tax revenues, and ₹67,877 crore in receipts from the Government of India. Gross borrowings are estimated at ₹1,16,000 crore.

Despite fiscal challenges stemming from reduced central tax devolution, the government allocated ₹51,034 crore for its five guarantee schemes. The Chief Minister asserted that the budget adheres to prudent fiscal deficit and debt-GSDP ratio norms. The projected revenue deficit (0.63% of GSDP), fiscal deficit (2.95% of GSDP), and total liabilities (24.91% of GSDP) all remain within the limits prescribed by the Karnataka Fiscal Responsibility Act, 2002.

Positive economic growth was highlighted, with the state’s GSDP growing at 7.4% in 2024-25, surpassing the national rate of 6.4%. Karnataka contributed 8.4% to the national GDP. The agriculture sector, after a drought-affected contraction in 2023-24, rebounded with 4% growth, exceeding the national average. Farmer welfare schemes received a substantial boost, with allocations rising from ₹44,000 crore to ₹51,339 crore. The industrial sector achieved 5.8% growth, and the government aims for 12% growth and 20 lakh new jobs by 2030 through its new Industrial Policy. Significant financial assistance and subsidies are earmarked to attract investments. The services sector, accounting for 66% of the state’s economy, grew at 8.9%, outperforming the national growth rate. New policies across various service sectors are projected to attract ₹1 lakh crore in investments. Finally, Karnataka secured $4.4 billion in foreign investments by December 2024, placing it third nationally.

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