Karnataka State Budget 2025-26 Analysis
Budget EstimateTotal expenditure, revenue receipts, fiscal deficit, and department-wise allocation for Karnataka FY 2025-26
Karnataka State Budget 2025-26 Budget at a Glance
Total Receipts
Rs 2.93 lakh crore
+10.4%
Total Expenditure
Rs 3.83 lakh crore
+10.7%
Fiscal Deficit
2.9%
Rs 90,428 crore
Capital Expenditure
Rs 71,166 crore
+29.4%
Tax Revenue
Rs 1.55 lakh crore
+10.7%
Interest Payments
Rs 38,428 crore
10% of expenditure
Karnataka Revenue Receipts 2025-26
Own tax revenue vs non-tax revenue breakdown
Karnataka Expenditure Breakdown 2025-26
Revenue vs Capital spending and department allocation
Revenue vs Capital Split
Top 10 Departments by Allocation
Fiscal Deficit as % of GSDP โ Karnataka 2025-26
The fiscal deficit for Karnataka in 2025-26 is 2.9% of GSDP (Rs 90,428 crore), reflecting the state's borrowing needs to fund development programmes.
States are expected to maintain fiscal deficit within 3% of GSDP as per the FRBM Act. Karnataka is maintaining fiscal discipline close to the recommended limit.
Interest payments at Rs 38,428 crore consume 10.0% of total expenditure.
Karnataka State Budget 2025-26 โ Receipts & Expenditure Summary
| Particulars | Amount | % of Total |
|---|---|---|
| A. Total Receipts | Rs 3.82 lakh crore | 100% |
| 1. Revenue Receipts | Rs 2.93 lakh crore | 76.6% |
| a. Own Tax Revenue | Rs 1.55 lakh crore | 40.6% |
| b. Non-Tax Revenue | Rs 18,000 crore | 4.7% |
| B. Total Expenditure | Rs 3.83 lakh crore | 100% |
| 1. Revenue Expenditure | Rs 3.12 lakh crore | 81.4% |
| 2. Capital Expenditure | Rs 71,166 crore | 18.6% |
| of which: Interest Payments | Rs 38,428 crore | 10.0% |
| C. Fiscal Deficit | Rs 90,428 crore | 2.9% of GSDP |
Source: Karnataka State Budget Documents via PRS India. All figures in Indian Rupees.
Karnataka Department-wise Expenditure 2025-26
Top departments by allocation in Karnataka for 2025-26
| Department โ | Revenue โ | Capital โ | Total โ | Share |
|---|---|---|---|---|
1. Education | Rs 42,000 crore | Rs 5,000 crore | Rs 47,000 crore | 12.3% |
2. Rural Development & Panchayat Raj | Rs 28,000 crore | Rs 8,000 crore | Rs 36,000 crore | 9.4% |
3. Health & Family Welfare | Rs 22,000 crore | Rs 5,000 crore | Rs 27,000 crore | 7.0% |
4. Water Resources | Rs 10,000 crore | Rs 12,000 crore | Rs 22,000 crore | 5.7% |
5. Transport & Infrastructure | Rs 8,000 crore | Rs 13,000 crore | Rs 21,000 crore | 5.5% |
6. Agriculture & Allied | Rs 18,000 crore | Rs 3,000 crore | Rs 21,000 crore | 5.5% |
7. Urban Development | Rs 14,000 crore | Rs 6,000 crore | Rs 20,000 crore | 5.2% |
8. Energy | Rs 15,000 crore | Rs 4,000 crore | Rs 19,000 crore | 5.0% |
9. Social Welfare | Rs 16,000 crore | Rs 2,000 crore | Rs 18,000 crore | 4.7% |
10. Police & Home | Rs 14,000 crore | Rs 2,000 crore | Rs 16,000 crore | 4.2% |
Karnataka Budget 2025-26 Analysis & Highlights
Key Highlights
- Karnataka Budget 2025-26 targets total expenditure of Rs 3.7 lakh crore, driven by tech-sector revenues.
- State GST collections projected at Rs 1.05 lakh crore, second only to Maharashtra among states.
- Bengaluru infrastructure package of Rs 20,000 crore for metro expansion, peripheral ring road, and commuter rail.
- IT sector contributes 25% of GSDP; tax revenues from tech companies anchor the state budget.
- Capital expenditure at Rs 60,000 crore, targeting infrastructure gap in Bengaluru and northern districts.
- Agriculture allocation of Rs 28,000 crore addresses Cauvery delta irrigation and dryland farming.
- Education spending of Rs 42,000 crore includes Rs 5,000 crore for engineering and medical college expansion.
- Healthcare allocation of Rs 22,000 crore extends Ayushman Bharat Karnataka coverage to 1.5 crore families.
- Fiscal deficit budgeted at 3.0% of GSDP, at the FRBM ceiling.
- Guarantee schemes (Gruha Lakshmi, Anna Bhagya, Shakti) consume Rs 55,000 crore โ 15% of total budget.
- Rs 8,000 crore for semiconductor and aerospace manufacturing in Mysuru-Tumkur corridor.
- Cauvery water sharing compliance requires Rs 3,000 crore for reservoir management and canal upgrades.
Compare Karnataka Budget โ Recent Years
Year-over-year comparison of key fiscal metrics
| Metric | 2021-22 | 2022-23 | 2023-24 | 2024-25 | 2025-26 |
|---|---|---|---|---|---|
| Total Expenditure | โ | โ | โ | Rs 3.46 lakh crore | Rs 3.83 lakh crore |
| Revenue Receipts | โ | โ | โ | Rs 2.65 lakh crore | Rs 2.93 lakh crore |
| Capital Expenditure | โ | โ | โ | Rs 55,000 crore | Rs 71,166 crore |
| Fiscal Deficit (% GSDP) | โ | โ | โ | 2.9% | 2.9% |
| Own Tax Revenue | โ | โ | โ | Rs 1.4 lakh crore | Rs 1.55 lakh crore |
Columns showing "โ" will populate as more data is ingested. Data from official budget documents via PRS India.
Understanding Karnataka State Budget 2025-26
The Karnataka state budget is the annual financial plan presented in the state legislature. It covers all revenue receipts, expenditure allocations across departments, and fiscal deficit management. State budgets are critical because states handle key development areas including education, health, agriculture, and infrastructure.
Karnataka Revenue Sources
State revenue comes from three sources: own tax revenue (state GST, stamp duty, excise, vehicle tax), non-tax revenue (fees, fines, interest), and transfers from the Centre (share of central taxes as per Finance Commission recommendations, plus grants-in-aid for specific schemes).
Fiscal Deficit and State Borrowing
Under the FRBM framework, states target a fiscal deficit of 3% of GSDP. States can borrow from the market via State Development Loans (SDLs), and the central government also provides loans. The RBI manages the borrowing calendar for states to ensure orderly market conditions.
Explore More
Compare Karnataka with other states
Side-by-side comparison of fiscal metrics across Indian states