Karnataka Budget 2026: Big AI push, 2nd Bengaluru airport, ₹4.48 lakh crore outlay

Karnataka Chief Minister Siddaramaiah on Friday presented the state’s Budget for the financial year 2026–27, announcing a total outlay of ₹4.48 lakh crore.

The budget, his record 17th as finance minister, focuses on technology-driven development, welfare measures, infrastructure expansion and social sector spending while attempting to manage a continued revenue deficit.

Presenting the budget in the state Assembly in Bengaluru, Siddaramaiah said the government aims to accelerate economic growth, strengthen welfare guarantees and invest in emerging technologies such as artificial intelligence (AI) while expanding infrastructure across Karnataka.

Record budget size and fiscal outlook

The ₹4.48 lakh crore budget marks one of the largest spending plans in Karnataka’s history. Revenue receipts for the year are estimated at ₹3,15,050 crore, including the state’s own tax revenues, non-tax revenues and transfers from the Union government.

The fiscal deficit is projected at ₹97,449 crore, which is about 2.95 per cent of the state’s Gross State Domestic Product (GSDP) and within fiscal responsibility limits.

However, the government acknowledged continued financial pressure due to welfare commitments and rising administrative expenditure. Karnataka has been running a revenue deficit for several years while maintaining large social spending commitments and infrastructure investments.

Social media ban for children under 16

One of the most widely discussed announcements in the budget was the proposal to ban social media use for children under the age of 16 in the state.

The government said the move is aimed at protecting minors from the negative psychological and behavioural effects of excessive digital exposure.

If implemented, Karnataka could become the first Indian state to introduce such a restriction. The proposal reflects growing global concern about the impact of social media platforms on the mental health and well-being of young users.

Infrastructure and Bengaluru development

Infrastructure development received a major push in the budget. The government announced plans to accelerate the development of a second airport for Bengaluru, aimed at supporting the growing aviation and technology hub.

Funds were also allocated for the development of several domestic airports across Karnataka. Additionally, infrastructure upgrades in Bengaluru—including improvements to the Outer Ring Road and urban transport networks—are expected to support the city’s rapid expansion.

Focus on technology and innovation

The state government emphasised technology-led economic growth, particularly in artificial intelligence and emerging digital sectors. Karnataka, home to India’s largest tech ecosystem, aims to strengthen its leadership in innovation through new technology initiatives and investments.

Officials said the focus on AI, research and technology infrastructure is intended to attract global investment and create high-skilled employment opportunities.

Welfare and social justice measures

The budget also placed significant emphasis on welfare programmes and social justice initiatives. A record ₹44,632 crore allocation was announced for Scheduled Castes and Scheduled Tribes welfare programmes, including housing, financial assistance, and education initiatives.

The government also announced plans to fill more than 56,000 vacant posts across departments, aiming to strengthen public services and create employment opportunities.

In the education sector, the state plans to recruit about 15,000 teachers and upgrade around 800 government schools under the Karnataka Public School system to improve educational infrastructure and quality.

Healthcare and social sector initiatives

Healthcare infrastructure also received attention in the budget. Funds have been earmarked for strengthening hospital infrastructure and establishing specialised medical facilities, including IVF centres in government hospitals.

These measures are aimed at improving access to advanced medical services and expanding public healthcare capacity across the state.

Political and economic significance

The 2026–27 budget comes at a politically important time for the Congress-led government in Karnataka. The administration is balancing its flagship welfare guarantees with economic development and infrastructure expansion.

Analysts say the budget attempts to maintain this balance by prioritising both social spending and long-term economic growth.

With a strong emphasis on technology, welfare and infrastructure, the Karnataka Budget 2026–27 outlines the government’s strategy to sustain economic momentum while addressing social and developmental challenges across the state.