Siddaramaiah defends borrowings, says debt lower than other states and Union govt

Bengaluru: Chief minister Siddaramaiah rejected assertions that his govt is running on loans, insisting Karnataka's borrowing remains within prescribed limits and compares favourably with other states and the Centre, while defending his 2026-27 budget. The budget projects total liabilities at Rs 8.2 lakh crore, or 24.9% of GSDP, just under the 25% cap under the Karnataka Fiscal Responsibility Act. "I have presented 17 budgets, and this is the first time 50 members, including 21 from the opposition, have participated in discussions that lasted 24 hours and 45 minutes," he said during his reply to the assembly debate Wednesday. Rejecting criticism over rising debt, he said the deficit is 2.9% — lower than most southern states — and total debt remains within limits. He said borrowing is inevitable for development. "I have never said loans should not be taken," he said. "All developed economies rely on borrowing. The question is whether loans are used for public welfare." Targeting the opposition, he said their criticism lacked depth. "No matter how much the opposition criticises, a mango cannot become a neem fruit. They called the budget ‘empty', but Karnataka has been given a filled pot, not an empty one," he said. The CM said the budget size for 2026-27 — Rs 4,48,004 crore — is a 9.4% increase from Rs 4,09,549 crore in 2025-26, which is higher than the Centre's 5.6% growth. Karnataka's GSDP growth of 8.1% also exceeds the national GDP growth of 7.4%, he said. He cited positive feedback from editorials and economists, describing the budget as inclusive and focused on infrastructure, irrigation, employment, social security, education, healthcare and investment support. On central finances, he said the Union govt's borrowings rose from Rs 14.7 lakh crore in 2024-25 to Rs 16.9 lakh crore in 2026-27, with total debt projected at Rs 218.6 lakh crore by March 2027. He railed at the previous BJP govt, saying, "They borrowed heavily but with limited investment leaving behind Rs 5.5 lakh crore in outstanding debt." Highlighting spending priorities, Siddaramaiah said allocations have increased compared to the previous govt, including Rs 20,200 crore to BBMP over four years and Rs 72,386 crore for education in 2026-27. He said Karnataka ranks second in GST collection and capital investment and borrowings of Rs 1.3 lakh crore must be seen against the overall budget size. On the guarantee schemes, he said Rs 1.3 lakh crore has been spent so far, with allocations continuing. He attributed the revenue deficit to reduced support from the Centre, stating that GST rate cuts lowered revenue growth from 10% to 4%, leading to losses of Rs 10,000 crore earlier and an estimated Rs 15,000 crore in 2026-27. The govt has earmarked Rs 10,600 crore for social security schemes. "We are focusing on inclusive growth and demand-driven economic policy. Opposition should not oppose the budget for political reasons," he said.