Freebies or financial burden? What Siddaramaiah’s record budget could mean for you

Chief Minister Siddaramaiah to present record 17th Budget for 2026-27; focus expected on welfare guarantees, infrastructure, irrigation, Bengaluru development and possible tax revisions.

Karnataka Chief Minister Siddaramaiah is set to table his record 17th State Budget, with the total size expected to touch around ₹4.50 lakh crore for 2026-27. The Budget comes amid high public expectations, with strong indications that welfare guarantees will continue to receive major allocations, alongside long-term development projects.

Last year, a ₹4.09 lakh crore Budget was presented for 2025-26. Due to salary revisions, inflation and other financial pressures, this year’s outlay is expected to rise further. Capital expenditure, which stood at ₹55,877 crore last year, may see an increase as this is considered politically significant.

Focus on Guarantee Schemes

The government has so far spent approximately ₹1,38,419 crore on guarantee schemes up to early 2026. Allocations across financial years stood at ₹34,859 crore in 2023-24 (partial year), ₹52,526 crore in 2024-25 (full implementation year), and ₹51,034 crore in 2025-26.

However, steps may be announced to rationalise guarantees. These include beneficiary classification, usage-based limits in Anna Bhagya and Gruha Jyothi schemes, caps on free bus travel for women, removal of ineligible beneficiaries, and appeals for financially stable citizens to voluntarily give up benefits.

A major announcement expected is under Anna Bhagya, distribution of 5 kg rice along with an “Indira Food Kit” instead of the current 10 kg rice. The kit may include toor dal, cooking oil, sugar, salt and green gram. Housing allocation under Ashraya and other schemes may be highlighted as a possible “seventh guarantee.”

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Sector-Wise Expectations

Education: Implementation of the Right to Education provisions, 25% reservation for poor children under RET Act, government-paid school fees, restoration of old pension scheme for teachers and staff, honorarium hike for guest teachers and midday meal workers.

Agriculture & Cooperation: Subsidies for organic farming, higher zero-interest cooperative loans, compensation hike for wildlife attack victims, Punjab-style toll-free crop transport, sugar mills bearing cane cutting costs, crop insurance expansion, APMC reforms, crackdown on fake fertilizers and pesticides, lake desilting and drip irrigation support.

Backward Classes: At least ₹10,000 crore allocation expected; reservation may rise to 50%. Separate allocation for Category 1 and 2A, revival of pre-matric scholarships stopped in 2022, increased grants to development corporations, UPSC support for backward class students.

Industry: Simplified procedures, tax reforms, industrial expansion beyond Bengaluru to tier-2 and tier-3 cities, MSME policy, KIADB and KSSIDC upgradation, industrial township authority formation, electricity tax reduction possibility, subsidy for 100% renewable energy industries, implementation of FKCCI recommendations.

Transport: Settlement of 38-month dues, wage revision, highway driver facilities, CCTV and helpline strengthening, unorganised drivers’ corporation, direct loan schemes for auto drivers, subsidy for electric autos and taxis.

Health: Infrastructure expansion, more beds in district and taluk hospitals, new ICU, dialysis and cancer units, recruitment of doctors and staff, maternal and infant mortality reduction plans, Ayushman expansion, new medical colleges in districts without one, research grants and health data digitisation.

Also Read:No emission certificate? Transport department collects ₹27 crore in fines from polluting vehicles

Irrigation and Regional Balance

Significant funds are likely for irrigation. The third phase of the Krishna Upper Project requires acquisition of 1.33 lakh acres, costing ₹70,000 crore. Around ₹8,000-₹15,000 crore may be earmarked this year.

To address regional imbalance, ₹43,914 crore is proposed over five years for 172 backward taluks, with ₹8,500-₹9,000 crore expected this year.

Bengaluru & Urban Focus

Metro expansion, double-decker infrastructure, PPP-based tourism development, industrial estates upgradation and support for Greater Bengaluru Authority (GBA) corporations have seen large funding demands:

East - ₹1,685 crore; West - ₹1,725 crore; North - ₹1,205 crore; South - ₹1,675 crore; Central - ₹2,047 crore.

Borrowings & Possible Tax Burden

The state had announced ₹1.14 lakh crore borrowing for 2025-26. A similar borrowing figure may be declared for 2026-27, while maintaining fiscal responsibility norms.

There are indications of a ₹1 hike in petrol and diesel cess. Excise duty, stamp duty, registration charges and motor vehicle tax may also see revisions.

Overall, the Budget is expected to balance welfare commitments with infrastructure growth, while managing rising financial pressure.