Stories
DK Shivakumar Faces Financial Pressure Amid Karnataka Cash Crunch, Project Backlog & Welfare Costs
N
News18•29-09-2026, 12:59
DK Shivakumar Faces Financial Pressure Amid Karnataka Cash Crunch, Project Backlog & Welfare Costs
- •Karnataka's Finance Department warns of spending restraint due to a projected revenue deficit of ‘22,957 crore for 2026-27 and a fiscal deficit of 2.95% of GSDP.
- •The state's liabilities are nearing the 25% limit at 24.94% of GSDP, raising concerns about fiscal responsibility.
- •A significant backlog of ongoing projects exists, with balance costs exceeding ‘2 lakh crore and pending bills in four major departments totaling over ‘36,000 crore.
- •Karnataka's five guarantee welfare schemes are budgeted to cost around ‘51,286 crore in 2026-27, adding to financial strain.
- •Chief Minister D.K. Shivakumar seeks Central support for major water projects like Mekedatu, whose estimated cost has risen to ‘16,745 crore, while downplaying the Finance Department's caution as a normal review.
Key Questions Answered
Karnataka's Finance Department has projected a revenue deficit of approximately ₹22,957 crore for the 2026-27 fiscal year, with the fiscal deficit estimated at 2.95% of the Gross State Domestic Product (GSDP).
According to a PRS analysis of the state budget, Karnataka's five flagship welfare guarantee schemes are budgeted to cost around ₹51,286 crore during the 2026-27 financial year.
Karnataka Chief Minister D.K. Shivakumar has urged the Union government to fast-track major water infrastructure initiatives, specifically highlighting the Mekedatu project and the Upper Bhadra project.
