Karnataka budget and state finances
Every year in February or March, the Karnataka government presents its budget to the Legislative Assembly, setting out what it plans to spend and how it will pay for it.
Budget 2026-27
In its budget for 2026-27, the Karnataka government plans to spend Rs 4.13 lakh crore (not counting repayment of old loans) and expects to receive Rs 3.15 lakh crore from taxes, its share of central taxes, grants and other sources (not counting borrowing). The gap, the fiscal deficit, is Rs 97,448 crore (2.9% of GSDP), which the state will meet by borrowing.
| Spending (excluding debt repayment) | Rs 4.13 lakh crore |
|---|---|
| Receipts (excluding borrowing) | Rs 3.15 lakh crore |
| Old loans to be repaid | Rs 35,316 crore |
| Fiscal deficit | Rs 97,448 crore (2.9% of GSDP) |
| Revenue deficit | Rs 22,957 crore (0.7% of GSDP) |
| GSDP, 2026-27 (projected) | Rs 33.05 lakh crore |
What the terms mean
The fiscal deficit is the amount the government must borrow in the year. A revenue deficit means day-to-day spending, such as salaries, pensions, interest and subsidies, is more than the revenue coming in; a revenue surplus means some revenue is left over for building roads, schools and other assets. Under national rules, states are generally expected to keep their fiscal deficit to about 3% of GSDP.
Sources
Figures: the Karnataka budget for 2026-27 (budget estimates), as summarised by PRS Legislative Research.
Reference links
- PRS Legislative Research: Karnataka Budget Analysis 2026-27: summary of the state budget
- Reserve Bank of India: State Finances, A Study of Budgets: yearly study of all state budgets
- Comptroller and Auditor General of India: audit reports on state finances