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Karnataka Chief Minister Siddaramaiah presented his record 15th budget on Friday with a budget size of Rs 3.71 lakh crore. For the first time, borrowings of the state are expected to exceed Rs 1 lakh crore as the government estimated gross borrowings of around Rs 1.05 lakh crore during the 2024-25 fiscal.

Apart from continuing with the flagship guarantee schemes that propelled the Congress to power in the state, Chief Minister Siddaramaiah – under pressure from party legislators – also allocated funds for several infrastructure projects. Apart from increased outlays for the irrigation and public works departments, the buget also discussed various avenues to increase revenue for the government such as keeping business establishments open till 1 am on all days.

The budget also provided a big push for investments from the private sector under the public-private partnership (PPP) model, while also looking to monetise various assets of the state government. Among the projects for which the state government is seeking funds under PPP are the Peripheral Ring Road, which is being repositioned as Bengaluru Infrastructure Corridor; extending Metro services to Tumakuru; a mega-port at Uttara Kannada; a mega textile park at Kalaburagi and others.

Compared to the Rs 3.27 lakh crore budget presented by Siddaramaiah in July 2023, the budget size saw an increase of 13.45 per cent to Rs 3.71 lakh crore. At the same time, borrowings swelled to Rs 1.05 lakh crore – a 23.5 per cent increase compared to the gross borrowings of Rs 85,818 crore in the July budget.

To increase revenue, Siddaramaiah also announced a hike in prices of Indian Made Liquor and beer. This will be the third hike in liquor prices over the past year.

Siddaramaiah kept his purse strings tight in the budget but the water resources department under Deputy Chief Minister D K Shivakumar and the public works department (PWD) under minister Satish Jarkiholi received better funding compared to the ‘guarantee budget’ of July 2023.

Among the major allocation for water resources was Rs 15,600 crore for constructing a balancing reservoir to augment the storage capacity of Tungabhadra Dam in Vijayanagar district and Rs 7,280 crore for new lift irrigation schemes and to rejuvenate old ones. For PWD, Rs 5,736 crore was allocated for the upgradation of state highways and Rs 4,000 crore for Phase-5 of State Highways Development Programme covering a length of 1,300 km, among others.

Several projects were also announced for Bengaluru, including a tunnel road at the traffic-dense Hebbal junction. “Widening of existing roads is difficult due to scarcity of land and problems in land acquisition,” Siddaramaiah said in the budget. Allocations were also made for white-topping of roads in Bengaluru, constructing all-weather roads within canal buffer zones, and a 250-metre high skydeck, among others.

Karnataka has estimated the total receipts of Rs 3.68 lakh crore, of which Rs 1.89 lakh crore is the state’s own revenue, Rs 13,500 crore is non-tax revenue, Rs 44,485 crore tax devolution from Centre and Rs 15,300 crore grant-in-aid. Along with it, the state will borrow Rs 1.05 lakh crore.

Total expenditure is pegged at Rs 3.71 crore, which includes revenue expenditure of Rs 2,90,531 crore, capital Expenditure of Rs 55,877 crore and loan repayment of Rs 24,974 crore. Despite the increased borrowings, total liabilities at the end of the 2024-25 fiscal was Rs 6.65 lakh crore, which was 23.68 per cent, according to the budget.

The presentation of the budget was interrupted by Opposition BJP and JD(S) legislators, who staged a walkout as Siddaramaiah read out the budget, and staged a protest saying that there was nothing for farmers in the budget. Siddaramaiah also touched upon the “losses” suffered by Karnataka due to faulty implementation of GST, reduced share of state taxes and the Centre not releasing funds for the Upper Bhadra project announced in the 2023-24 Union budget.