Karnataka Chief Minister Siddaramaiah defended the State Budget 2026–27, highlighting that the state’s fiscal deficit remains within limits compared to other South Indian states. Siddaramaiah emphasized that despite challenges, Karnataka’s revenue collection surpasses neighboring states. He addressed criticism from the Opposition, stating that their claims lack a deep understanding of the budget intricacies.
Speaking at the Legislative Assembly, Siddaramaiah pointed out that Karnataka and Maharashtra have relatively lower revenue deficits compared to other states. He attributed the revenue deficit to immature economic policies at both state and Union government levels. The Chief Minister criticized the impact of the Union government’s sudden rationalization of GST rates on the state’s economy.
Siddaramaiah highlighted the adverse effects of GST rate revision on Karnataka’s economy, leading to a significant revenue shortfall. He noted that despite challenges, the state anticipates an increase in revenue collection compared to the previous year. The Chief Minister also addressed the reduction in the state’s share in central tax devolution under successive Finance Commissions.
Opposition leaders have raised concerns over deficit budgets under the current government compared to surplus budgets during the BJP’s tenure. Siddaramaiah refuted these claims, emphasizing that every budget since 2000 has had a fiscal deficit. He attributed surplus budgets during the BJP’s term to lump-sum GST compensation releases.
The Chief Minister underscored the financial challenges faced by Karnataka due to the Union government’s failure to fully compensate for GST-related revenue losses. He highlighted the impact of reduced tax shares and the exclusion of cesses and surcharges from the divisible tax pool. Siddaramaiah criticized the discontinuation of GST compensation and the denial of recommended grants by the Union government.
