Karnataka State Budget 2026-27 Analysis
Budget EstimateTotal expenditure, revenue receipts, fiscal deficit, and department-wise allocation for Karnataka FY 2026-27
Karnataka State Budget 2026-27 Budget at a Glance
Total Receipts
Rs 3.15 lakh crore
+13.6%
Total Expenditure
Rs 4.13 lakh crore
+11.9%
Fiscal Deficit
2.9%
Rs 97,448 crore
Capital Expenditure
Rs 74,681 crore
+13.2%
Tax Revenue
Rs 2.83 lakh crore
+82.6%
Interest Payments
Rs 53,332 crore
13% of expenditure
Karnataka Revenue Receipts 2026-27
Own tax revenue vs non-tax revenue breakdown
Karnataka Expenditure Breakdown 2026-27
Revenue vs Capital spending and department allocation
Revenue vs Capital Split
Top 10 Departments by Allocation
Fiscal Deficit as % of GSDP โ Karnataka 2026-27
The fiscal deficit for Karnataka in 2026-27 is 2.9% of GSDP (Rs 97,448 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 53,332 crore consume 12.9% of total expenditure.
Karnataka State Budget 2026-27 โ Receipts & Expenditure Summary
| Particulars | Amount | % of Total |
|---|---|---|
| A. Total Receipts | Rs 3.15 lakh crore | 100% |
| 1. Revenue Receipts | Rs 3.15 lakh crore | 99.9% |
| a. Own Tax Revenue | Rs 2.83 lakh crore | 89.8% |
| b. Non-Tax Revenue | Rs 16,000 crore | 5.1% |
| B. Total Expenditure | Rs 4.13 lakh crore | 100% |
| 1. Revenue Expenditure | Rs 3.38 lakh crore | 81.9% |
| 2. Capital Expenditure | Rs 74,681 crore | 18.1% |
| of which: Interest Payments | Rs 53,332 crore | 12.9% |
| C. Fiscal Deficit | Rs 97,448 crore | 2.9% of GSDP |
Source: Karnataka State Budget Documents via PRS India. All figures in Indian Rupees.
Karnataka Department-wise Expenditure 2026-27
Top departments by allocation in Karnataka for 2026-27
| Department โ | Revenue โ | Capital โ | Total โ | Share |
|---|---|---|---|---|
1. Social Welfare and Nutrition | Rs 39,271 crore | Rs 8,677 crore | Rs 47,948 crore | 11.6% |
2. Education, Sports, Arts and Culture | Rs 36,082 crore | Rs 7,972 crore | Rs 44,054 crore | 10.7% |
3. Energy | Rs 24,491 crore | Rs 5,411 crore | Rs 29,902 crore | 7.2% |
4. Agriculture and Allied Activities | Rs 19,632 crore | Rs 4,338 crore | Rs 23,970 crore | 5.8% |
5. Irrigation and Flood Control | Rs 18,371 crore | Rs 4,059 crore | Rs 22,430 crore | 5.4% |
6. Transport | Rs 14,843 crore | Rs 3,280 crore | Rs 18,123 crore | 4.4% |
7. Welfare of SC, ST, OBC and Minorities | Rs 14,589 crore | Rs 3,223 crore | Rs 17,812 crore | 4.3% |
8. Health and Family Welfare | Rs 14,522 crore | Rs 3,209 crore | Rs 17,731 crore | 4.3% |
9. Water Supply and Sanitation | Rs 10,587 crore | Rs 2,339 crore | Rs 12,926 crore | 3.1% |
10. Police | Rs 10,276 crore | Rs 2,271 crore | Rs 12,547 crore | 3.0% |
Karnataka Budget 2026-27 Analysis & Highlights
Key Highlights
- Total expenditure for 2026-27 is budgeted at Rs 4,48,004 crore (Rs 4,12,688 crore excluding debt repayment), up 12% over the 2025-26 revised estimates.
- Fiscal deficit is targeted at Rs 97,448 crore, or 2.9% of GSDP โ just inside the 3% ceiling recommended by the 16th Finance Commission for 2026-31.
- Revenue deficit is budgeted at Rs 22,957 crore (0.7% of GSDP), down from Rs 25,449 crore (0.8%) in the 2025-26 revised estimates.
- Capital outlay rises 14% to Rs 71,924 crore, after being cut 8% below budget in 2025-26 when revenues undershot.
- The five guarantee schemes cost Rs 51,286 crore in 2026-27 โ 12% of expenditure excluding debt repayment โ led by Gruha Lakshmi at Rs 28,608 crore.
- Committed expenditure of Rs 1,85,025 crore (salaries Rs 90,557 crore, interest Rs 53,332 crore, pensions Rs 41,136 crore) absorbs 59% of revenue receipts, up from 51% in 2024-25.
- Central tax devolution jumps 24% to Rs 63,050 crore as Karnataka's 16th Finance Commission share rises from 3.65% to 4.13% of the divisible pool.
- Own tax revenue is budgeted at Rs 2,20,000 crore (6.7% of GSDP), with State GST the largest source at Rs 91,000 crore.
- Outstanding liabilities are projected at Rs 8,24,389 crore, or 24.94% of GSDP, essentially flat against the 2025-26 revised estimate of 24.96%.
- Water Supply and Sanitation is the fastest-growing sector, up 69% to Rs 12,926 crore on Rs 10,433 crore for Jal Jeevan Mission.
- Education gets Rs 44,054 crore (+11%), though its 10.7% share of expenditure trails the 14.5% all-states average.
- Transport spending rises 26% to Rs 18,123 crore, including Rs 7,640 crore of capital outlay on roads and bridges.
- GSDP for 2026-27 is projected at Rs 33,05,500 crore (+7%), and recruitment has been initiated for 56,432 government posts.
Compare Karnataka Budget โ Recent Years
Year-over-year comparison of key fiscal metrics
| Metric | 2022-23 | 2023-24 | 2024-25 | 2025-26 | 2026-27 |
|---|---|---|---|---|---|
| Total Expenditure | โ | โ | โ | Rs 3.69 lakh crore | Rs 4.13 lakh crore |
| Revenue Receipts | โ | โ | โ | Rs 2.77 lakh crore | Rs 3.15 lakh crore |
| Capital Expenditure | โ | โ | โ | Rs 65,982 crore | Rs 74,681 crore |
| Fiscal Deficit (% GSDP) | โ | โ | โ | 3.0% | 2.9% |
| Own Tax Revenue | โ | โ | โ | Rs 1.55 lakh crore | Rs 2.83 lakh crore |
Columns showing "โ" will populate as more data is ingested. Data from official budget documents via PRS India.
Understanding Karnataka State Budget 2026-27
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.
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Compare Karnataka with other states
Side-by-side comparison of fiscal metrics across Indian states