CM Siddaramaiah defends Karnataka’s fiscal management, blames Centre for fund shortfalls
Bengaluru (PTI): Chief Minister Siddaramaiah on Monday defended Karnataka’s fiscal management and blamed the Centre for shortfalls in expected funds, saying the state had been forced to present a deficit Budget despite maintaining financial discipline.
Addressing a training session for legislators on the state budget, the CM explained the structure of the 2026–27 Budget, the state’s revenue sources and expenditure commitments, while also responding to opposition criticism over rising debt.
Siddaramaiah said the state’s latest Budget for 2026-27 size stood at Rs 4.48 lakh crore, compared to Rs 4.09 lakh crore in the previous financial year.
However, he said Karnataka could not fully implement last year’s proposed expenditure as funds expected from the Union government did not arrive.
“One reason was that funds that were supposed to come from the Central Government did not arrive. Because of that, we could not reach the total expenditure proposed in the Budget and were forced to present a deficit Budget,” he said.
According to him, the introduction of the Goods and Services Tax (GST) had slowed the growth of state tax revenues.
“Before the introduction of GST, the growth rate of our tax revenue was about 10 per cent. After GST was nationalised, the growth rate dropped to around four per cent,” he said, adding that the impact had been felt across states, including those ruled by the BJP.
Referring to fiscal discipline norms under the Fiscal Responsibility and Budget Management Act framework, the Chief Minister said a state’s finances were considered sound if it maintained a revenue surplus, kept fiscal deficit within 3% and limited debt to 25 per cent of Gross State Domestic Product.
He said Karnataka’s GSDP was about Rs 33.5 lakh crore, and the government was trying to ensure borrowing remained within permissible limits.
Responding to criticism from the opposition, Siddaramaiah said he had presented 17 budgets in his career and had consistently tried to maintain fiscal prudence.
“These days, the opposition frequently alleges that Siddaramaiah has taken excessive loans and that the state is running on debt… Even in this Budget, I have tried to maintain financial discipline,” he said.
He noted that Karnataka had maintained a revenue surplus until 2018, but now faced a deficit due to structural changes in revenue flows and the end of GST compensation from the Centre in 2022.
“For 2025–26, the revenue deficit was around Rs 19,000 crore, and for next year it is expected to be around Rs 22,000 crore. If the funds due from the Centre had been released, this deficit could have been eliminated and we could have maintained a surplus,” he said.
He also cited the implementation of the Jal Jeevan Mission as an example of financial strain on states. The scheme, estimated to cost around Rs 69,000 crore in Karnataka, is supposed to follow a 50:50 funding pattern between the Centre and the state.
“So far, the Centre has provided only about Rs 11,000 crore, while we have already spent more than Rs 27,000 crore. Essentially, we have also borne the Centre’s share,” he said.
Despite these constraints, Siddaramaiah said Karnataka’s economic performance remained strong. The state’s growth rate for 2025–26 was estimated at 8.1 per cent, compared to the national average of about 7.4 per cent.
He pointed out that Karnataka ranked second in the country in GST collections after Maharashtra.
Explaining the structure of state finances, Siddaramaiah said Karnataka’s own tax revenue mainly came from commercial taxes, stamp duty and registration, motor vehicle taxes and excise duties, while additional income came through non-tax revenues such as fees and royalties.
However, he said the state received only a small share of taxes collected by the Centre from Karnataka.
“Every year, Karnataka contributes over Rs 4.5 lakh crore in taxes to the Centre. However, the share returned to the state is only around Rs 73,000 crore. This means that for every Re one Karnataka contributes to the Centre, only about 15 paise comes back to the state, while 85 paise remains with the Centre,” he said.
Siddaramaiah said the issue was not unique to Karnataka and affected several states.
“This is not merely a political statement; several states are facing similar injustice. It is our duty to point it out,” he said.
He also explained that government spending was broadly divided into revenue expenditure, such as salaries, pensions and subsidies, and capital expenditure, including infrastructure like roads, schools and hospitals.
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Speaker Khader dismisses BJP's charges of 'delay' in swearing-in of Jeevaraj as MLA
Bengaluru (PTI): Karnataka Assembly Speaker U T Khader on Wednesday rejected opposition BJP's allegations of delaying the swearing-in of D N Jeevaraj as MLA, asserting that the process was being handled strictly in accordance with constitutional provisions and rules.
BJP candidate Jeevaraj, who had lost the 2023 Sringeri Assembly election to Congress leader T D Raje Gowda, was declared elected late Sunday night after reverification and recounting of postal ballots in compliance with a High Court order.
The recount reduced 255 votes from Gowda's tally, overturning his earlier victory margin of 201 votes and reversing the result.
The recount followed an election petition filed by Jeevaraj.
Addressing reporters, Khader maintained that there was no delay in administering the oath to Jeevaraj, who was declared elected from the Sringeri Assembly constituency after a High Court-ordered recount of postal ballots.
“Where have we delayed? The application was submitted at 11 am. If an application is given in the morning and by evening someone says it’s delayed — how is that a delay?” he said, dismissing the allegations.
The Speaker said the matter involved 'technical issues' that required examination before fixing a date for oath-taking.
“When such a matter comes, we also need to examine it and take a decision as per rules. If an application is given in the morning, at least 24 hours must be given,” he said.
Khader stressed that his role was bound by the Constitution and not influenced by political considerations.
“When an elected MLA asks for time, we must give it under the Constitution and law. Can we refuse? No, we have to give it,” he said, rejecting suggestions that he was acting under party pressure.
He also underlined the need for trust in democratic institutions amid the controversy.
“A democracy and parliamentary system must function on trust. Without that, how can democracy be strengthened? Trust is essential,” he said, cautioning against creating suspicion around constitutional positions.
On claims that the delay was linked to the ongoing political and legal dispute over the recount, Khader said the issue did not fall within his purview.
“My responsibility is to act as per the Constitution and rules. I will ensure that whatever is due to them is done as soon as possible,” the Speaker explained.
He said he had already communicated his position when contacted and would formally inform the concerned parties. “There is no delay, nor any intention to delay. I will discharge my duties as per the Constitution,” he said.
Khader also pointed to possible legal complications in hastily administering the oath.
“If I give the oath to one person and tomorrow the court declares someone else the winner, what happens then? Will it automatically cancel? Will confusion arise?” he asked, indicating the need for due diligence.
On concerns that Jeevaraj had lost over two years of tenure, the Speaker said representation was linked to that constituency rather than an individual.
“Whoever becomes the MLA represents the constituency. Benefits are not given to an individual,” he said, adding that issues of alleged irregularities should be examined by the Election Commission.
The remarks come after the Leader of Opposition BJP in the Karnataka Assembly, R Ashoka on Wednesday accused the Speaker of 'deliberately' delaying the oath and approached Governor Thaawarchand Gehlot seeking intervention, even suggesting that the Governor administer the oath if required.
Chief Minister Siddaramaiah termed the process 'Vote Dacoity' by Jeevaraj and said an FIR has been registered against the newly elected Sringeri MLA.
Defending the recount process, Jeevaraj denied allegations of tampering, while the High Court has stayed an FIR filed against him in connection with the postal ballot issue.
