Karnataka Budget 2026–27: Siddaramaiah unveils Rs 4.48 lakh crore plan, IT park for Mangaluru

Karnataka Budget 2026–27: Siddaramaiah unveils Rs 4.48 lakh crore plan, IT park for Mangaluru

Mangalore Today News Network

Bengaluru, Mar 6, 2026: Chief Minister Siddaramaiah on Friday presented his record 17th State Budget, proposing a ₹4.48 lakh crore outlay for the financial year 2026–27, even as Karnataka faces a revenue deficit for the third consecutive year.

The budget estimates total revenue receipts at ₹3,15,050 crore, including the state’s own tax revenue of ₹2,20,000 crore, non-tax revenue of ₹16,000 crore and ₹79,050 crore in transfers from the Government of India.

With gross borrowings of ₹1,32,000 crore and non-debt capital receipts of ₹190 crore, the total receipts for 2026–27 are projected at ₹4,47,240 crore.

The total expenditure is estimated at ₹4,48,004 crore, comprising revenue expenditure of ₹3,38,007 crore, capital expenditure of ₹74,682 crore, and loan repayments of ₹35,316 crore.

The government has projected a revenue deficit of ₹22,957 crore and a fiscal deficit of ₹97,449 crore, which is 2.95% of the Gross State Domestic Product (GSDP). Total liabilities by the end of the year are estimated at ₹8,24,389 crore, accounting for 24.94% of GSDP. The government said both figures remain within the limits set under the Karnataka Fiscal Responsibility Act, indicating continued fiscal discipline.

Key announcements

The government said a revised Detailed Project Report (DPR) for the Mekedatu Dam Project will soon be submitted to the Government of India along with a proposal for forest clearance. The project aims to supply drinking water to Bengaluru and has previously faced opposition from Tamil Nadu.

The state also announced plans to enact the Rohith Vemula Act to prevent caste-based discrimination and atrocities against students in universities.

Welfare and infrastructure

Under tribal welfare initiatives, the Sri Maharshi Valmiki Administrative Soudha will be constructed at Sumanahalli in Bengaluru at a cost of ₹50 crore to house offices of the Scheduled Tribes Welfare Department.

Waqf properties located in prime commercial areas will be developed under a Public-Private Partnership (PPP) model.

For city infrastructure, ₹1,255 crore has been allocated for ward-level road and infrastructure development across five city corporations, while 100 Miyawaki urban forests will be created to expand green spaces.

Technology and innovation

To improve ease of doing business, the state has launched a unified investment portal developed with Microsoft, offering over 100 services across 30 departments.

The Indian Institute of Science will host the Bangalore Robotics and AI Innovation Zone (BRAIN) under ARTPARK in collaboration with the Indian Space Research Organisation and Karnataka State Electronics Development Corporation Limited.

A drone testing and performance evaluation facility will also be set up in Chikkaballapur.

IT expansion and coastal focus

The Chief Minister said Mysuru will be developed as Karnataka’s second IT hub to reduce pressure on Bengaluru.

In a major boost for the coast, a new IT park will be established in Mangaluru by KEONICS, aimed at strengthening the region’s technology ecosystem and employment opportunities.

Economic outlook

Siddaramaiah said Karnataka has developed a sustainable growth framework described as the “11G Model Economy.”

The state recorded 8.1% real GSDP growth in 2025–26, higher than the national growth rate of 7.4%, he said, adding that Karnataka’s views must be considered in shaping national trade policy.

Healthcare initiatives

Healthcare projects announced include:

A 450-bed multi-speciality hospital in Karwar costing ₹198 crore

A trauma care centre in Raichur costing ₹10 crore

Peripheral Cancer Centres in Mysuru and Tumakuru costing ₹92 crore

Airport and aviation infrastructure

The government will prepare a feasibility report for a second airport in Bengaluru to reduce congestion at Kempegowda International Airport, currently India’s third-busiest airport.

A total of ₹1,593 crore has been released for the development of seven domestic airports across Karnataka.

A flight training school will be set up at Vijayapura Airport, while aircraft manufacturing and assembly activities will be taken up at Shivamogga Airport under a PPP model. An aerospace park will also be developed near Mysuru Airport.

Major Bengaluru infrastructure projects

Several key infrastructure projects were announced for Bengaluru, including:

Development of the Outer Ring Road corridor from Silk Board to KR Pura at ₹450 crore

A tunnel and elevated road from Hebbal Junction to Mekhri Circle costing ₹2,250 crore

A 17-km North–South Corridor from Hebbal to HSR Layout–Silk Board costing ₹17,780 crore

White-topping of 158 km of roads costing ₹1,700 crore

GST and revenue trends

GST accounts for about 43% of Karnataka’s own tax revenue, making it the largest revenue source, with the state ranking second in India in GST collections.

However, GST rate rationalisation has slowed revenue growth. Average monthly GST growth has dropped from around 10% to about 4%, leading to an estimated revenue loss of ₹10,000 crore this year and ₹15,000 crore next year.

Employment and recruitment

The government has begun the process of filling 56,432 posts across departments, with five years’ age relaxation granted due to recruitment delays caused by court cases.

Science and technology

Karnataka currently hosts 550 Global Capability Centres (GCCs) and aims to establish 500 more by 2029.

A Science City in Bengaluru will be built at a cost of ₹233 crore, while six new planetariums will be set up in Vijayanagar, Ballari, Chitradurga, Yadgir, Koppal and Bidar.

Two AI Centres of Excellence will also be set up in Bengaluru in collaboration with NASSCOM.

Education initiatives

About 800 schools will be upgraded to Karnataka Public Schools at a cost of ₹3,900 crore over three years.

A ₹24-crore English language training programme for teachers will support bilingual education in government schools.

An AI-based personalised digital tutor will be provided to 12.28 lakh students from Classes 8–12 in collaboration with Indian Institute of Technology Dharwad.

Social and environmental measures

The government announced a ban on social media use by children under 16 years of age.

A Leopard Rehabilitation Centre will be established at Bannerghatta Biological Park to rehabilitate leopards captured from residential areas.

All gram panchayats in the state will be renamed “Mahatma Gandhi Gram Panchayats.”

Tourism and irrigation

Tourism will be boosted through a ropeway project connecting Mullayyanagiri and Seethalayyanagiri in Chikkamagaluru under a PPP model.

At Tadadi, eco-friendly accommodation, walking corridors and tourism information centres will be developed.

Major irrigation works include completion of the 135-km Chitradurga branch canal by 2027, replacement of 33 gates of the Tungabhadra Dam, and implementation of the Uduthore Halla project in Chamarajanagar district costing ₹490 crore.

Excise reforms

The government will introduce a globally recognised taxation system linking excise duty to alcohol content from April 2026. Price fixation will be deregulated, pricing slabs will be reduced from 16 to 8, and geo-fenced e-lock systems will replace physical escorts for dispatches.

Excise revenue collection up to February stood at ₹36,492 crore, reflecting 12.7% growth, with the 2026–27 target set at ₹45,000 crore.