Karnataka contributes approximately between ₹4.5 lakh crore and ₹5 lakh crore to the Central government every year in the form of taxes, cess. The central government is set to devolve ₹63,049.58 crore as its duties, and taxes, and has recommended a tax share of 4.13 per cent for the State.
CM Siddaramaiah, in his budget reponse saif that the 2026 Union budget lacked concrete action plans, timelines, or financial commitments. He added, “Karnataka’s share of divisible taxes has been reduced to 4.131%, down sharply from 4.71% 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 ₹10,000 to ₹15,000 crore for the state. 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.”
The criticism comes amid broader opposition attacks on the budget’s lack of transparency. Congress general secretary Jairam Ramesh said that even after a 90-minute speech, the finance minister failed to provide a clear picture of allocations for major programmes, calling the budget “woefully short of the hype”.
Karnataka’s Large and Medium Industries Minister M.B. Patil said the announcement of high-speed rail corridors between Bengaluru–Hyderabad and Bengaluru–Chennai brought limited benefit to the State, as the trains would run less than 100 km within Karnataka.
Priority, he said, should have been given to a Bengaluru–Pune high-speed rail corridor, which would have delivered greater economic value. Patil also flagged the absence of any mention of the Upper Krishna national project, delayed funds for the Upper Bhadra project, and the lack of schemes aimed at farmers, despite repeated representations by the State.
Karnataka’s Social Welfare Minister H.C. Mahadevappa alleged that the Union government continued to frame Budgets that disproportionately benefit corporates, NRIs and the wealthy, while failing to introduce meaningful schemes for the common people. “This Budget is a mirror reflecting its anti-people policies,” he said.
He also pointed to what he described as inadequate allocations for Scheduled Castes and Scheduled Tribes, who account for around 24 per cent of the country’s population. The Budget, he said, failed to make even a minimum provision of the expected ₹5,000 crore for the development of Kalyana Karnataka and did not mention the ₹2,461 crore allegedly owed to farmers for produce procured under the Minimum Support Price.
The Budget also offered limited concessions to assembly election-bound States such as Kerala, West Bengal, Assam and Tamil Nadu. In contrast, Union Budget 2025–26, which announced the establishment of a National Makhana Board in Bihar, with an initial allocation of ₹100 crore to boost production, processing and marketing. This was later followed by the approval of a Central Sector Scheme for the Development of Makhana, with a total outlay of ₹476.03 crore for the period from 2025–26 to 2030–31.
Published on February 1, 2026
