Two hat-tricks and a hard truth: Siddaramaiah’s 17th budget faces fiscal squeeze

Bengaluru: Siddaramaiah has rarely entertained superstitions. Yet his 17th budget will be presented at 10.15am on Friday — 15 minutes before rahu kala, widely regarded as inauspicious. The finance minister who scripted history in the early 2000s by presenting Karnataka's first revenue surplus budget under the Fiscal Responsibility and Budget Management framework is now on course for an uncomfortable milestone. If trends hold, he will become the first finance minister since the FRBM era to present three consecutive revenue deficit budgets.
His immediate predecessor had tabled two deficit budgets during the Covid years before returning to a modest surplus of Rs 402 crore in 2023-24. That recovery has since been reversed, with two successive revenue deficit budgets under Siddaramaiah. The current revenue mobilisation pattern offers little indication of a turnaround. Symbolism aside, the bigger story lies in the numbers. The revenue deficit streak is only one of two hat-tricks in the making. Karnataka enters the new fiscal year under visible strain. Revenue growth has slowed, borrowings are rising and the space to mobilise additional resources is narrowing. In 2025-26, collections have fallen short of targets. The shortfall is expected to force a downward revision of the year's outlay from nearly Rs 4.1 lakh crore to about Rs 3.95 lakh crore. That would mark the third consecutive year of a reduced outlay compared to the budget estimate. Despite this pattern, the govt is expected to project a higher outlay for 2026-27 — above Rs 4.1 lakh crore and possibly up to Rs 4.3 lakh crore. The move raises questions about the basis for expanding allocations when past projections have not translated into spending on the ground. A closer look at expenditure trends shows the imbalance more clearly. Revenue expenditure — including salaries, pensions and interest payments — has largely progressed as planned. Capital expenditure has lagged. By Jan, only around 46% of the 2025-26 capital allocation was used, raising concerns about delays in infrastructure creation and the possibility of a last-minute spending rush. Borrowings continue to mount. They are expected to cross Rs 1.1 lakh crore in 2025-26, pushing total liabilities beyond Rs 7.6 lakh crore. With revenue mobilisation remaining weak, a higher outlay in the coming year would likely translate into additional debt. The challenge before the govt, therefore, is less about symbolism and more about restoring credibility to its fiscal arithmetic.On the eve of his 17th state budget, a huge portrait of Siddaramaiah was unveiled in Mysuru, his hometown. Created by artists on the premises of Kote Anjaneyaswamy Temple, near the north gate of the Mysuru Palace, the 8,125sqft picture shows Siddaramaiah holding a budget briefcase against a map of Karnataka in the colours of the Kannada flag. With Friday's presentation, Siddaramaiah will be one short of the record by former Gujarat finance minister and ex-governor Vajubhai Vala, who presented 18 state budgets. However, Siddaramaiah holds the record for presenting the highest number of budgets as CM or finance minister in Karnataka's history.