Big budget, bigger impact: Siddaramaiah’s 17th budget may hike fuel cess, expand welfare

CM Siddaramaiah finalises 2026-27 State Budget; focus expected on long-term infrastructure, welfare expansion and resource mobilisation with likely tax revisions.

Chief Minister and Finance Minister Siddaramaiah has completed final preparations to present the State Budget for 2026-27. This will be his 17th Budget, marking a record presentation. Expectations are high as the government is likely to balance welfare schemes, long-term development projects and revenue generation measures.

The total outlay is expected to reach around ₹4.49 lakh crore, close to ₹4.50 lakh crore. In 2025-26, the Budget size stood at ₹4.09 lakh crore. This indicates an increase of nearly ₹40,000 crore. The rise is attributed to salary revisions, inflation and other financial commitments.

In 2025-26, the government had announced borrowing of ₹1.14 lakh crore. For 2026-27 too, borrowing is likely to remain at around ₹1.14 lakh crore, keeping within the limits of the Fiscal Responsibility framework.

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A major highlight could be the introduction of the ‘Indira Food Kit’ under the existing ‘Anna Bhagya’ scheme. Instead of distributing 10 kg of rice alone, the proposal may include 5 kg rice and a kit containing toor dal, cooking oil, sugar, salt and green gram.

The government is also expected to announce a large-scale housing distribution plan as a “7th Guarantee”, aiming to counter criticism that homes are not being provided under schemes like Ashraya.

There are also indications that gram panchayats may be named after Mahatma Gandhi and special grants could be allocated for construction of rural footbridges.

Under the third phase of the Upper Krishna Project (UKP), the government plans to begin land acquisition for 1.33 lakh acres. The total requirement is estimated at ₹70,000 crore, to be released in phases. In this Budget, ₹8,000 to ₹15,000 crore may be earmarked for land acquisition.

To address regional imbalance, a committee has recommended ₹43,914 crore over five years for development of 172 backward taluks. For the current year, ₹8,500 to ₹9,000 crore may be allocated.

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To mobilise resources for guarantees and welfare schemes, certain tax hikes are likely. A ₹1 increase in cess on both petrol and diesel is almost certain. The government may also increase excise duty on liquor, registration and stamp duty charges, and motor vehicle tax.

Overall, Siddaramaiah’s 17th Budget is expected to be a balancing exercise between development, welfare expansion and additional revenue measures.