Bengaluru (Karnataka) [India]: Chief Minister Siddaramaiah presented the Karnataka State Budget for the financial year 2025-26 in the Legislative Assembly, announcing an allocation of ₹51,034 crore for various guarantee schemes. He emphasized that these allocations were made while adhering to fiscal discipline, maintaining a fiscal deficit norm of 3% of GSDP and a debt-to-GSDP ratio of 25% over the past two budgets.
Key Highlights of Karnataka Budget 2025-26:
1. Agricultural Sector Revival:
- The agriculture sector, which had contracted by -4.9% in the previous year, has rebounded with a 4% growth in 2024-25, surpassing the national agricultural growth rate of 3.8%.
- This recovery was credited to:
- Government initiatives supporting Kharif sowing.
- Favourable monsoon conditions.
- Improved reservoir levels.
- Allocation for the farming sector has been increased to ₹51,339 crore from ₹44,000 crore last year.
2. Chief Minister’s Infrastructure Development Program (CMIDP):
- A new initiative, the CMIDP, has been launched with an investment of ₹8,000 crore.
- The focus areas include:
- Minor irrigation.
- Road networks.
- Urban infrastructure across all legislative assembly constituencies.
3. Governance and Transparency:
- The government reiterated its commitment to combat corruption and enhance transparency.
- A new counselling-based transfer system will be introduced for Group-B and Group-C posts in key revenue-generating departments such as:
- Commercial Tax, Excise, Stamps & Registration, Transport, and Mines & Geology.
- Technology-driven governance measures will be implemented to improve efficiency.
- Over ₹1 lakh crore has been directly transferred to beneficiaries’ bank accounts, eliminating intermediaries.
4. Financial Performance and Revenue Growth:
- On average, ₹233 crore has been disbursed per assembly constituency under the government’s guarantee schemes, strengthening public trust.
- Karnataka, contributing 8.4% to India’s GDP, is projected to grow at 7.4% in 2024-25, surpassing the national growth rate of 6.4%.
- State revenue is expected to grow by 10.3% year-on-year in 2024-25, with non-tax revenue projected at ₹14,500 crore, reflecting a 10.5% increase from the previous year.
- A Resource Mobilization Committee has been formed to boost non-tax revenue and has submitted its interim recommendations.
5. Industrial Growth and New Policy (2025-30):
- The new Industrial Policy (2025-30) targets:
- 12% industrial growth.
- Creation of 20 lakh jobs by 2030.
- The industrial sector has grown at 5.8% this year.
- An allocation of ₹13,692 crore has been made for financial assistance and subsidies to attract investments.
6. Service Sector: The Pillar of Karnataka’s Economy:
- The service sector remains the largest contributor to Karnataka’s economy, accounting for 66% of the state’s Gross Value Added (GVA).
- The sector recorded an impressive 8.9% growth rate, exceeding the national average of 7.2%.
- Policies in IT, biotechnology, and tourism are expected to attract investments worth ₹1 lakh crore, with ₹13,500 crore allocated for subsidies and financial assistance.
7. Revenue-Sharing with Central Government:
- Karnataka has advocated for a fairer revenue-sharing mechanism with the central government:
- Proposed a 50% share of the divisible pool for states.
- Suggested capping cesses and surcharges at 5% of gross tax revenue.
- Recommended that excess funds should be part of the divisible pool.
Conclusion:
The Karnataka Budget 2025-26 reflects a balanced approach focused on agricultural revival, infrastructure development, industrial growth, and service sector expansion. With a commitment to fiscal discipline and transparency, the state aims to strengthen public trust and sustain economic growth above the national average.