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.
Let the Truth be known. If you read VB and like VB, please be a VB Supporter and Help us deliver the Truth to one and all.
Deputy CM Shivakumar slams BJP MPs for their silence on LPG shortage in India
Bengaluru (PTI): Karnataka Deputy Chief Minister D K Shivakumar on Tuesday said the shortage of LPG refills has become a serious concern in the state, amid warnings from hotel owners that they may be forced to shut down operations if supplies do not improve soon.
Speaking to reporters in Bengaluru, Shivakumar said the issue must be discussed in Parliament and urged Members of Parliament to raise the matter, as the shortage was affecting businesses and the public.
"The government must discuss this in Parliament. They should allow a discussion today... From today itself, we are facing problems. There is no stock," he said.
The Deputy Chief Minister criticised BJP MPs for not speaking about the LPG shortage despite its impact on businesses such as hotels and catering establishments.
ALSO READ: SC dismisses plea against holding of 'Kambala' outside two districts of Karnataka
He noted that hoteliers have already begun limiting their operations due to dwindling supplies.
"Now, because of the gas price hike and the gas shortage, people are going on strike, but the BJP MPs are not talking about it. They raise their voice on many other issues - strangely enough - but they are silent on this," he said.
Shivakumar also pointed to the rising fuel costs, saying diesel prices had recently increased sharply, adding further pressure on businesses.
According to him, the combined impact of fuel price increases and LPG supply disruptions was affecting the hospitality sector.
He said even former Prime Minister H D Deve Gowda spoke about some of the issues pertaining to Karnataka and called for discussion.
"Deve Gowda is talking about Mekedatu and Yettinahole projects. Let him direct his party MPs to talk about this (fuel shortage) in the Parliament.
It is not right for me to launch a verbal attack on him, considering his age. Let him suggest solutions for Mekedatu and Yettinahole. Let his party MLAs talk about what their party did, and I will counter it with what we have done," Shivakumar said.
Hotel associations in the state have warned that continued supply shortages could force establishments to temporarily shut down, particularly those dependent on commercial LPG cylinders for daily cooking. The Deputy Chief Minister indicated that the issue required urgent attention at the national level, as LPG supply and pricing fall under the Centre's purview.
