Ambitious revenue target sets stage for year-end revision

Bengaluru: Chief minister Siddaramaiah has set a much higher revenue target for 2026-27 despite a significant shortfall in the current fiscal, raising questions over how the govt plans to bridge the gap without raising taxes. The widening gap between projections and actual collections in 2025-26 has forced the govt to scale down its expectations with the revenue estimate of Rs 2,08,100 crore for the ongoing fiscal has now been revised to Rs 1,94,100 crore.
Siddaramaiah has raised the revenue target for the forthcoming fiscal to Rs 2,20,000 crore, a 13.5% increase over the revised estimate. Yet, the budget did not propose fresh taxes or increase in existing rates. Experts say the higher target could play out in three ways: The govt may eventually raise tax rates; revenue buoyancy driven by higher consumption could help meet the target; or the estimates may again be revised downward later in the year. "It has become a trend for govts to make ambitious budget estimates and revise it downwards towards the end of the financial year," said BDA Satya Babu Bose, director, Centre for Rural Development and Study. "Even the BJP-led central govt is no exception. Going by the pattern since Congress formed the govt in 2023 in Karnataka, one should not be surprised to see the same trend play out at the end of 2026-27." Experts say projecting higher revenue in budget estimates enhances the govt's borrowing capacity. The shortfall in property-related revenue reflects the challenge. Siddaramaiah had projected Rs 28,000 crore from property registrations in 2025-26, but the stamps and registration department collected only Rs 22,629 crore, forcing the govt to revise the estimate to Rs 24,000 crore. For 2026-27, the target has been increased to a colossal Rs 29,000 crore. Realtors say this could lead to a revision in guidance value — the minimum property price fixed by the govt on which 5% stamp duty and 1.5% registration charge are levied.