BELAGAVI – Karnataka Revenue Minister Krishna Byre Gowda has reassured the State Assembly that the government is committed to adhering to the Fiscal Responsibility and Budget Management Act, maintaining a limit of 3% of Gross State Domestic Product (GSDP) for now. However, Mr. Gowda also cautioned that this limit could be exceeded if unexpected circumstances arise at the last minute.
During discussions on the supplementary budget estimate, Leader of Opposition R Ashoka voiced concerns about the rising fiscal deficit in Karnataka. According to government data for FY26, the deficit has increased from 2.55% to 2.95% of GSDP.
The fiscal deficit has risen sharply from ₹65,525 crore in 2023–24 to ₹90,420 crore in FY26, increasing from 2.55% of GSDP to 2.99%, Opposition Leader R Ashoka said. He noted that despite Karnataka being considered a fiscally better-managed state, its total debt has jumped to ₹4.08 lakh crore from ₹3.24 lakh crore last year.
The State Government’s adherence to the Fiscal Responsibility and Budget Management Act is crucial in maintaining financial stability and fostering economic growth. The Act sets specific limits on fiscal deficit, public debt, and revenue deficit for state governments to help maintain a balanced economy.
Ashoka’s concerns reflect a growing apprehension among political leaders regarding the State Government’s financial management, particularly as they approach crucial budget-related discussions in the coming months.
Ashoka also flagged weak revenue mobilisation, pointing out that collections stood at just ₹90,998 crore against an estimated ₹2.08 lakh crore, warning that continued poor financial management could push the fiscal deficit beyond the 3% threshold. However, Minister Krishna Byre Gowda assured that the government would not allow the deficit to breach the prescribed limit.
