Karnataka budget outlay crosses ₹4 lakh crore for the first time

The budget outlay includes revenue expenditure of ₹3,11,739 crore, capital expenditure of ₹71,336 crore — up from 55,877 crore in 2024-25 — and loan repayment of ₹26,474 crore. This essentially shows that the loans being raised are not only being used for capital expenditure, but also for loan repayment and revenue expenditure. 

Karnataka’s budget outlay has for the first time crossed ₹4 lakh crore. In his 16th budget Chief Minister Siddaramaiah presented on Friday (March 7, 2025) for the fiscal year 2025-26, the total budget outlay has been estimated to be ₹4,09,549 crore. However, this budget has also been a revenue deficit budget, like the previous year’s budget. The revenue deficit has been pegged at ₹19,262 crore — down from ₹27,354 crore in 2024-25. 

The total revenue receipts is estimated to be ₹2,92,477 crore, of which ₹2,08,100 is the State’s own tax revenues, ₹16,500 crore non-tax revenues and Government of India receipts is ₹67,877 crore. The gross borrowings is pegged at ₹1,16,000 crore. 

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The budget outlay includes revenue expenditure of ₹3,11,739 crore, capital expenditure of ₹71,336 crore — up from ₹55,877 crore in 2024-25 — and loan repayment of ₹26,474 crore. This essentially shows that the loans being raised are not only being used for capital expenditure, but also for loan repayment and revenue expenditure. 

Saying that the State has been facing fiscal challenges due to cut in tax devolution to Karnataka from the Centre, Mr. Siddaramaiah said that his government had allocated ₹51,034 crore for implementation of the five guarantee schemes this year and managed the guarantees ‘within the prudent fiscal deficit norm of 3% of Gross State Domestic Product (GSDP) and debt-GSDP ratio of 25% for the last two budgets’. 

For the financial year 2025-26, revenue deficit of ₹19,262 crore is 0.63% of GSDP, fiscal deficit of ₹90,262 crore is 2.95% of GSDP and total liabilities of the State at the end of 2025-26 is estimated to be ₹7,64,655 crore, which is 24.91% of GSDP. Thus, the budget has remained within permissible limits of the Karnataka Fiscal Responsibility Act, 2002. 

The economy of Karnataka (GSDP) grew at 7.4% in 2024-25, outpacing the national growth rate of 6.4%, Mr. Siddaramaiah said in his budget speech. Karnataka has contributed 8.4% to the national GDP in the same year.