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“The Budget is not merely a lifeless exercise of adding and subtracting numbers. It carries our promises made to the seven crore people of the state, who are breathing hopes of a better life,” said Karnataka Chief Minister Siddaramaiah, who also holds the finance portfolio, during his speech while presenting the state Budget for 2025-26 – his 16th one – in the Assembly Friday.
What Siddaramaiah did not say was that the Budgets are also political statements on the efficiency of a ruling dispensation in managing the wealth of the state while balancing the need for economic growth and the demands of every section of society that supports the ruling dispensation.
While the broad numbers of revenue and expenditure from the Budget hold the interest of economists and financial experts, the numbers within the numbers tell the political story of allocations to specific sections of society that support a political party. It also shows the allocations to sectors that interest key leaders and legislators of the ruling camp.
Going by the political aspect of the 2025-26 Budget, Siddaramaiah seems to have ticked all the boxes on the back of a 11% growth in state revenue, from Rs 2.63 lakh crore to Rs 2.92 lakh crore over the past fiscal.
With the Congress electorally relying on some of the poorest sections of society, a robust growth in the state’s economy at a rate of 7.4% in 2024-25 as compared to the national rate of 6.4%, has given the CM room to balance populism – seen as a key factor in bringing the party to power in 2023 – and demands for development funds by MLAs.
The Rs 4.09 lakh crore Budget is a 10% increase from the Rs 3.71 lakh crore Budget presented last year. Borrowings also saw a 10% rise from Rs 1.05 lakh crore to Rs 1.16 lakh crore but remained at 24.91%, just within the prescribed fiscal discipline limit of 25% of the GSDP. The state’s fiscal deficit stood at 2.95% – within the 3% limit.
The Congress government’s move to increase the outlay for welfare schemes for its key support bases – minorities, Scheduled Castes (SCs), Scheduled Tribes (STs) and Other Backward Classes (OBCs) – has drawn criticism from the Opposition BJP, which has called it a “halal Budget”.
“The Congress government has presented an anti-people and Muslim budget. The budget is just for Muslims,” Leader of the Opposition in the Assembly R Ashoka alleged, referring to the Rs 1,000 crore allotted for development of minority colonies and Rs 150 crore for the repair of Waqf properties.
Apart from earmarking Rs 51,000 crore for the Congress’ five guarantees that cut across community lines, Siddaramaiah has increased the outlay for the welfare of the minorities by 40%, from Rs 3,200 crore to Rs 4,500 crore. It has also allocated Rs 42,000 crore for programmes linked to the SCs and STs, and another Rs 4,300 crore for the OBCs.
Defending the allocations, Siddaramaiah said the literacy rate among minorities is the lowest and hence money needed to be given for their welfare and education. “Educating the minorities will facilitate their entry into the mainstream. We don’t say ‘sab ka saath, sab ka vikas’ like them and do the opposite. It is a country of pluralism. The BJP is against secularism,” the CM said, adding that the increase in allocation was not just restricted to Muslims but was for all minorities, including Christians (Rs 230 crore), Jains and Buddhists.
Another key objection that the BJP had raised was the announcement of reservation for contractors within the 2B (Muslim) category in government contracts below Rs 2 crore and in procurement of goods and services by various departments. Arguing that reservation is not religion-based, the CM said these quotas are already available to other communities like the OBCs, SCs and STs.
Though minorities make up only around 11% of the state’s population – with Muslims around 9% – they are considered to be the main Congress vote base, and when combined with OBCs, SCs and STs, make up over 50 per cent of Karnataka’s population.
With Siddaramaiah emerging as a key leader of the OBC Kuruba community, and the Muslims in more recent days, the emphasis on these communities in the Budget is being seen as a sign of the Karnataka CM cementing his support base among these communities which are crucial to the Congress’ electoral fortunes in Karnataka.
It is also seen as a politically astute move to counter challenges to Siddaramaiah’s own position from within his own party from contenders like deputy CM D K Shivakumar, who belongs to the dominant Vokkaliga community and has portrayed the image of a religiously inclined leader by taking part in mass events like the Maha Kumbh Mela recently.
“We have also increased benefits for government employees, ASHA workers, anganwadi workers, wrestlers, priests, mid-day meal scheme workers, and guest teachers. If the state was lacking in resources, would this have been possible? We have gone in the direction of attempting to achieve the goal of equality in society,” Siddaramaiah said after the Budget.
The Budget drew praise from Congress president Mallikarjun Kharge, who termed it as a “very good Budget”. “It is the 16th Budget presented by Siddaramaiah and probably a record. If there is any finance minister who has presented 16 budgets in the country, it is Siddaramaiah,” Kharge said on Saturday.
The Congress president also called for Siddaramaiah and Shivakumar – seen to be a challenger for the CM’s post – to work together to protect the future of the Congress. “The Congress supports individuals who are doing a good job. We have benefited from this approach and the deputy CM has also been a major contributor. I would like to congratulate Siddaramaiah and Shivakumar. They must work together and focus on the development of the state,” Kharge said.
“If we move away from talking about development and focus on other issues then surely people will not favor us. If they (Siddaramaiah and Shivakumar) go in separate directions then it will be a problem for us. They must work together,” the Congress president said in Kalaburagi.
Siddaramaiah’s Budget was presented on a day when the Karnataka High Court quashed an ED summons issued to his wife in connection with the alleged MUDA land allocation scam. The CM’s name too had appeared in the alleged scam but he was given a clean chit by Karnataka Lokayukta police last month.
While the Budget addresses the interests of the key electoral constituencies of the Congress and CM Siddaramaiah himself, it has also addressed the demands of top leaders like Kharge, Shivakumar and other Congress MLAs.
The Budget provided an outlay of Rs 5,000 crore for the backward Kalyan Karnataka region, where Kharge is considered a key Congress leader. “The people of the region have hit a jackpot. Khargeji got Article 371 (J) for the region. Our government is giving Rs 5,000 crore to the region. Along with Minister Priyank Kharge and Gulbarga MP Radhakrishna, we will be kicking off many developmental projects for the region,” Shivakumar said at an event in Kalaburagi that he attended with Kharge.
Several of Shivakumar’s interests have also been looked after by Siddaramaiah through the Budget, including a Rs 7,000 crore allocation for Bengaluru city region, which is under the care of the deputy CM. The allocation is an over 100% increase on the Rs 3,000 crore allocated for the city’s development in 2024-25.
“The Budget has given emphasis on Brand Bengaluru initiatives. This will help 1.4 crore Bangaloreans. The tunnel road will be built and all the future Metro lines will have double decker flyovers. An amount of Rs 3,000 crore has been allocated to build 300 km of roads on the buffer zones of raja kaluves. We will also build new roads,” Shivakumar said.
The Budget has also increased funding from Rs 16,000 crore to Rs 23,000 crore for major and minor irrigation projects, which fall under Shivakumar’s water resources ministry. It has also approved funding to the tune of Rs 19,000 crore for a tunnel road project for Bengaluru, which has been proposed by the deputy CM.
One of the biggest political challenges for the Karnataka CM in managing the economic fortunes of the state has been the paucity of funds for development projects in the constituencies of the 135 Congress MLAs. The pumping of Rs 52,000 crore into the guarantee schemes of the Congress has meant that little funds are available to the MLAs.
The MLAs have been constantly knocking on the CM’s door seeking development funds with complaints that they are unable to face their constituents with empty pockets.
Siddaramaiah has announced a 47.3% increase in capital expenditure – to the tune of Rs 83,200 crores – to address the demand for development funds from MLAs. He also announced that a special grant of Rs 8,000 crore for all Assembly constituencies will be cleared after a review.
Reacting to the BJP’s criticism that the state is being driven towards bankruptcy by the Congress government on account of increased borrowings to fund its political interests, Siddaramaiah said borrowings were within the prescribed limits. “Ashoka is criticising our Budget without knowing about the Financial Responsibility Act. The Central government’s fiscal deficit is 4.61%. But the fiscal deficit of the state is 2.95 %. For 2025-26, it is a revenue surplus budget,” the CM said.
