Union Budget disappointing, lacks foresight, says Karnataka CM Siddaramaiah

Citing lesser allocations to the state in central grants, Siddaramaiah said, a big injustice is happening to us. When Karnataka asked for fairness, this budget delivered neglect.

Terming the union budget presented by Finance Minister Nirmala Sitharaman in the Parliament as ''disappointing'', Karnataka Chief Minister Siddaramaiah on Sunday said it ''lacks foresight''. The CM also claimed that a ''big injustice'' has happened to Karnataka. ''This budget is disappointing and lacks foresight. It only contains statements,'' Siddaramaiah said. Speaking to reporters here, he said, ''Karnataka has not been given anything. Not only that, the entire south India hasn't been given anything in the budget. Karnataka has been given 'Chombu' (an empty small, round water container) in the budget.'' ''Only two things have been majorly mentioned about Karnataka are Bengaluru-Chennai and Hyderabad-Bengaluru high speed rail corridors in five years. This is of no benefit to Karnataka. It is more beneficial to Telangana and Tamil Nadu. We had asked for Bengaluru-Mumbai, Bengaluru-Mangaluru, and Bengaluru-Pune high speed rails,'' he added. The finance minister in the budget has relied heavily on grand narratives like ''Viksit Bharat and Kartavya'', but offers little clarity on delivery, timelines, or accountability. ''It is only for talk and not in deeds,'' the CM said. He said there is no mention about the state's irrigation projects. ''We had asked for Upper Bhadra and Upper Krishna projects to be declared as national projects.'' The CM also hit out at the Centre for delays in clearances to river water projects like Mekedatu and Mahadayi. Citing lesser allocations to the state in central grants, Siddaramaiah said, ''a big injustice is happening to us.'' ''When Karnataka asked for fairness, this budget delivered neglect. This Budget has not just neglected Karnataka, it has done injustice to its people,'' he added. Expressing disappointment that the Centre has chosen to retain devolution at 41 per cent without acknowledging the steadily increasing fiscal responsibilities of states, the CM said a growing share of revenues is now raised through cesses and surcharges that are not shareable, while centrally sponsored schemes are increasingly funded by states themselves, and major decisions like GST rate reductions are taken unilaterally by the Centre, yet the revenue loss is borne by states. Karnataka had legitimately expected the states' share to be increased to at least 50 per cent as a matter of fairness and cooperative federalism, but unfortunately, this concern has not been addressed, he said. Further terming the outcome of the Finance Commission recommendations as ''disturbing'', Siddaramaiah said, Karnataka's share of divisible taxes has been reduced to 4.131 per cent, down sharply from 4.71 per cent under the 14th Finance Commission. ''This is not an isolated decision but part of a consistent pattern of sidelining Karnataka, despite its strong economic contribution to the national exchequer. This reduction will result in an annual loss of Rs 10,000 to Rs 15,000 crore for the state, directly affecting our capacity to invest in welfare, infrastructure, irrigation and development,'' he said. The CM also said that the budget is deeply disappointing for farmers and the rural economy. There is nothing concrete to address the pressing issues faced by sugarcane farmers, toor dal growers, and producers of pulses and food grains, despite repeated representations from across the country. Alleging that the BJP-led central government has seriously eroded the sanctity and credibility of the budget by repeatedly failing to deliver on projects it announces, he said, a close look at the revised estimates for 2025-26 shows that most centrally sponsored schemes have been sharply cut compared to the budget estimates, exposing the budget as a document of promises rather than performance. ''When announced allocations are not honoured, the Budget cannot be taken seriously as a fiscal commitment,'' he said. By consciously reducing revised estimates for centrally sponsored schemes, the Centre is effectively shifting the financial burden onto state governments that are already under severe fiscal stress due to unilateral decisions and coercive economic policies, he further said, adding that, ''his undermines cooperative federalism and turns the union budget into an exercise in rhetoric rather than responsible governance.'' Siddaramaiah said it is ''unfortunate'' that Karnataka has been completely ignored in the proposed rare earth corridors, despite the state having known deposits of rare earth minerals in regions such as Chamarajanagar and other parts of Karnataka. ''At a time when rare earths are strategically critical for clean energy, electronics, and national security, sidelining Karnataka reflects a lack of seriousness in recognising regional potential and building a truly diversified national supply chain,'' he said. The CM also said that the claim that the fiscal deficit for 2025-26 has been maintained at 4.4 per cent of GDP needs to be seen in the proper context. This figure has not been achieved through improved efficiency or stronger revenues, but largely because many of the announcements made in the previous Budget were simply not implemented. While the Centre had estimated an expenditure of Rs 5,41,850 crore for centrally sponsored Schemes for 2025-26, the revised estimates now show that only Rs 4,20,077 crore will be spent by the end of the fiscal year. ''In other words, the fiscal deficit has been contained by under-spending and deferring commitments, not by sound fiscal management,'' he added.

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