Karnataka’s subsidy bill has gone up by a whopping ₹9,200 crore in the Budget Estimates (BE) 2026-27 compared to BE 2025-26.
Budget papers released by the state government on Friday show it has increased from ₹93,943.20 crore in BE 2025-26 to ₹1,03,143.77 crore in BE 2026-27. This despite the fact that the five-guarantee bill, pegged at ₹ 51,286 crore, is almost the same as in the previous two years, suggesting that the subsidy bill is being driven north due to other schemes. The growth is driven by the Ministry of Energy, Finance, Revenue, Transport and Agriculture and Horticulture.
The Medium Term Fiscal Plan (MTFP) report presented on Friday attributes the increase to “both the expansion of beneficiary coverage and an upward revision of benefit levels within the main social schemes”.
“While such spending advances important equity and social goals, it also puts permanent pressure on the revenue account by increasing the share of fixed spending,” he warns.
It further cites the 16th report of the Finance Commission, which states that it “warns that increasing expenditure on subsidies, if not regularly evaluated, may limit fiscal space and affect the quality of expenditure. The Commission emphasizes the need for better transparency in accounting, sharper targeting of beneficiaries, results-based evaluation and avoidance of open-ended commitments”.
The MTFP recommends “structured review mechanisms, improved targeting through technology and clearly defined reassessment or sunset provisions can help maintain fiscal balance while continuing to support vulnerable sections”.
Published – 07 March 2026 20:30 IST
