The Chief Minister of Karnataka, Siddaramaiah, on Friday presented the state budget for the financial year 2025-26 in the Legislative Assembly and stated that the government launched a new Industrial Policy 2025-30 that aims to create 20 lakh jobs by 2030.
Karnataka is poised to achieve a GSDP growth rate of 7.4 percent, outpacing the national growth rate of 6.4 percent, Siddaramaiah stated. He further said, “Karnataka is one of the fastest-growing states in India, contributing 8.4 percent to the National Gross Domestic Product (GDP).”
Key Decisions In Budget 2025-26
1. Guarantee Schemes:
The Karnataka government allocated Rs. 51,034 crores for the implementation of various guarantee schemes in the current fiscal year.
Siddaramaiah also mentioned that the government has managed these guarantees while maintaining fiscal discipline, adhering to the fiscal deficit norm of 3 percent of the Gross State Domestic Product (GSDP) and a debt-to-GSDP ratio of 25 percent over the past two budgets.
2. Agriculture Sector’s Boom:
The Karnataka CM said that the agriculture sector has registered a positive growth of 4 percent in 2024-25 after registering a growth rate of -4.9 percent in the previous year. Furthermore, he emphasised that this growth has also outpaced this year’s all-India agricultural growth rate of 3.8 percent.
He also credited the growth of the agriculture sector to the government’s proactive interventions to encourage Kharif sowing, normal monsoon, and adequate reservoir levels.
According to IANS, Rs 44,000 crores was allocated to various departments for farmer welfare schemes in the previous year. This year, the state government has allocated Rs 51,339 crores for the farming sector.
3. Infrastructure Development:
The state government has also launched the Chief Minister’s Infrastructure Development Program (CMIDP) with an investment of Rs 8,000 crores and will focus on enhancing minor irrigation, road networks, and urban infrastructure across all legislative assembly constituencies, ANI stated.
4. Industrial Policy 2025-30:
The government has launched an Industrial Policy 2025-30 that aims for industrial growth at 12 percent and to create 20 lakh jobs by 2030. Commending the industrial sector, CM Siddaramaiah said that it has achieved 5.8 percent growth in the current year, and to attract large investments, the government has committed financial assistance and subsidies of Rs 13,692 crores.
5. Tackle Corruption and Boost Citizens’ Trust in the Government:
The government will introduce a new counseling-based transfer system for Group-B and Group-C posts across key revenue-generating departments. These departments will include Commercial Tax, Excise, Stamps and Registration, Transport, and Mines and Geology.
Furthermore, as per ANI, technology-driven governance measures will be implemented. Over Rs 1 lakh crore has already been directly transferred to beneficiaries’ bank accounts, eliminating intermediaries. Also, Rs 233 crores, on average, have been disbursed per assembly constituency under the government’s guarantee schemes to strengthen citizens’ trust in the administration.
6. Service Sector’s Dominance:
CM Siddaramaiah, in the budget presentation, also stated that the service sector is the dominant component of the economy of the state, accounting for 66 percent of Karnataka’s Gross Value Added (GVA).
The sector has achieved a growth rate of 8.9 percent in the year 2024-25, exceeding the national average growth rate of 7.2 percent, CM Siddaramaiah said.
According to ANI, policies in tourism, IT, and biotechnology are expected to bring in investments worth Rs 1 lakh crores, with Rs 13,500 crores committed toward subsidies and financial assistance.
7. Revenue-Sharing Between State and Centre:
Karnataka has advocated for a fairer revenue-sharing mechanism with the central government, proposing a 50 percent share of the divisible pool for states, ANI reported. Karnataka has also called for capping cesses and surcharges at 5 percent of gross tax revenue, with excess funds being part of the divisible pool.
Moreover, state revenue is expected to grow by 10.3 percent year-on-year in 2024-25, with non-tax revenue projected at Rs 14,500 crores, reflecting a 10.5 percent increase from the previous year. To further enhance non-tax revenue, the government has formed a Resource Mobilization Committee, which has submitted its interim recommendations.
On the other hand, the Karnataka BJP launched an attack on the Congress’ budget of the state and posted on X, “Scam CM @siddaramaiah in Karnataka presents a Halal Budget—appeasement at its peak!”
Scam CM @siddaramaiah in Karnataka presents a Halal Budget—appeasement at its peak!
Reservation for Muslims in government contracts
₹50,000 assistance for Muslim simple marriages
₹150 crore for infrastructure development of Waqf properties & graveyards
₹50 lakh… pic.twitter.com/Ts3ZrnYai1
— BJP Karnataka (@BJP4Karnataka) March 7, 2025
(with agencies’ inputs)
