Karnataka Chief Minister Siddaramaiah has presented his third consecutive budget with an outlay of ₹4.48 lakh crore for 2026-27.
The state's fiscal deficit and debt-GSDP ratio in 2026-27 are expected to be 2.95% and 24.94% respectively.
The 2026-27 budget outlay for the state is 13.3% higher than the ₹3.95 lakh crore in the 2025-26 Revised Estimate (RE) numbers.
The government also plans to recruit 56,432 employees, which is expected to increase revenue expenditure in the coming years.
Receipts from the Union government are expected to increase from ₹62,933 crore in 2025–26 to ₹79,050 crore in 2026–27.
The rise follows the recommendation of the Sixteenth Finance Commission to increase Karnataka’s share of the divisible tax pool to 4.131%, up from 3.647% recommended by the Fifteenth Finance Commission.
Siddaramaiah accused the Union government of not adhering to the federal system of governance and said the state had been treated unfairly.
Karnataka, along with seven other states, has asked the GST Council to create a revenue protection mechanism to compensate states for losses arising from GST rate changes.
