Priyanka Tiwari
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On Friday, Karnataka Chief Minister Siddaramaiah introduced his budget for the year 2025-26 estimating it at 4 lakh crores, an increase from last year’s 3.71 lakh crores. The budget focused on social welfare schemes for the infrastructure and industrial development alongside social spending in order to accelerate the growth of the state’s economy while also driving social equity measures.
Gehlot gave the state legislature’s first address for the year on March 3, marking the commencement of the new legislative session which kickstarted with setting the cabinet's agenda.
In a bid to enhance medical facilities stemmed out from feedback the state had received, the government revamped its spending for healthcare. From last year’s budget of 12,000 crores, the healthcare budget was raised to 14,500 crores. The government seeks to improve the operational efficiency of its flagship hospitals and broaden the scope of free medical care. This includes improvements to district hospitals, increased ambulance services, and the establishment of new medical colleges in other non-urban areas. State-run hospitals have also been allocated 1,500 crores to equip them with better medical technology.
Development of infrastructure remains a key focus area in the budget as well with roads, urban transport, and rural connectivity projects having a financial outlay of Rs 50,000 crore. To complete the Bengaluru suburban rail project, which has been stalled for some time, the state will provide Rs 8000 crore. The city will also receive Rs 6500 crore for metro expansion for reduced congestion and improved public transport through additional metro lines. Rs 3000 crore has also been allocated for the development of national and state highways, while rural roads will receive Rs 2000 crore.
In addition to this, the industrial sector will receive a boost with the allocation of Rs 10,000 crore towards investment and manufacturing attraction. Karnataka will be positioned as the main IT and startup hub of the state through the incentivisation of technology and new businesses. Special economic zones will be constructed for electronics, pharmaceuticals, and renewable energy. Further the state will provide increased fiscal incentives to micro, small, and medium enterprises (MSMEs) through a Rs 3500 crore package for easier access to credit and infrastructure development.
The cleation of more funds for the education sector is observed as it is increased from Rs. 29000 crore last year to Rs. 32000 crore in this budget. Along with these, an allocation of Rs. 5000 crore is given for upgrading government schools, Rs. 3500 crore is allocated for higher education, and Skill development Programs is given Rs 2000 crore. The revision will enable the recruitment of additional teachers, enhanced classrooms, and provision of more scholarships for students from low-income families. Digital learning programs are also introduced to address the urban-rural gulf in educational resources.
Close attention is given to agriculture with a specific allocation of Rs. 20000 crore for aiding farmers. The expenditure on seed, fertilizer subsidization, and irrigational aids is also on the rise, in addition to Rs. 5500 crore on modernization of irrigation facilities. Crop insurance policies are designed to grant farmers financial aid with a budget of Rs 2000 crore during natural disasters. Furthermore, Rs 3000 crore will enhance the control of cold storage and the processing of food to enable farmers to obtain a higher market value for their products.
Perhaps the most interesting part of this budget is the increase in the pay of state legislators. Under the aegis of Siddaramiah, the Business Advisory Committee has recently sanctioned increments in the allowances and capped salaries of MLAs. This decision is likely to stir considerable controversy in light of the government also increasing taxes and recalibrating the budgetary allocations for welfare spending. Other opposition parties led by BJP has strongly condemned this decision arguing that the taxpayerr’s money should be allocated for infrastructural development instead of enhancing legislative remuneration.
The budget is focused primarily on revenue generation, with the government aiming to spend more than in the previous fiscal year. The forecast for the budget revenue for the state is estimated at 2.85 lakh crore, trying to fetch more collections from GST, excise duties, property tax, and even income tax. As stated by the Chief Minister, there will be no new tax major. There is a possibility the government will revise the existing tax framework in some areas to enhance revenue.
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