Bengaluru: With chief minister Siddaramiah set to present his 17th budget on March 6, the state’s spending pattern in the current fiscal year points to a widening gap between capital and revenue expenditure.The 2025-26 budget projected total revenue and capital expenditure, excluding debt servicing, at over Rs 3.8 lakh crore. As of Jan 2026, the govt spent nearly Rs 2.5 lakh crore — about 65% of the estimated outlay.However, capital expenditure has lagged significantly. Of the Rs 71,336 crore allocated for capital works, only 46% — Rs 32,847 crore — has been utilised so far. In contrast, of the Rs 3.1 lakh crore earmarked for revenue expenditure, which includes salaries, subsidies and interest payments, around 69% has already been spent.The 46% capex is for the original outlay made in the budget in March 2025. In the interim, the govt revised the outlay for capital expenditure to Rs 83,000 crore, before revising it downward to around Rs 72,000 crore.Chief minister’s economic advisor Basavaraj Rayareddi said the govt is working to step up spending during the rest of the fiscal. “Efforts are on to fulfil the expenditure commitment proposed in the budget. There are practical challenges considering revenue slowdown driven by ill-timed GST rate rationalisation and choked fund flow from the Centre. We will maximise the spending before the end of the current fiscal.“An analysis of the numbers shows that of the Rs 2.5 lakh crore spent till Jan, 86.8% — nearly Rs 2.2 lakh crore — has gone towards revenue expenditure. The skew has triggered concerns over a possible year-end rush to utilise funds, which often raises questions about the quality of expenditure and pace of project implementation.BDA Satya Babu Bose, director, Centre for Rural Studies and Development, said: “Missing the expenditure target means that development has taken a hit. The govt in any case, cannot reduce the committed expenditure, which is the largest component of revenue spending.”On the receipts side, the state had estimated revenue of over Rs 2.9 lakh crore for 2025-26, excluding borrowings. This included nearly Rs 2.1 lakh crore from the state’s own taxes, Rs 16,500 crore from non-tax sources and Rs 67,877 crore from central transfers. As of Jan, revenue realisation stood around Rs 2.2 lakh crore.With expenditure touching Rs 2.5 lakh crore, the gap of nearly Rs 30,000 crore has been bridged through borrowings. A key concern remains that a large portion of borrowed funds is being used for revenue expenditure rather than asset creation. The state is slated to spend Rs 45,600 crore on interest payments alone under revenue expenditure this fiscal.Take for instance the crucial water resources department. The govt allocated only Rs 18,828 crore in the 2025-26 budget of which only Rs 8,846 crore was meant for capex, with Rs 7,000 crore already having been spent. While this department shows nearly 80% spending, officials pointed out that the department needed Rs 90,000 crore for ongoing projects alone, but the allocation was barely 20% of that. “For the next fiscal, we will request at least Rs 60,000 crore,” an official said.Bose added: “…Whenever the govt wishes to cut down spending, it reduces capital expenditure. There are multiple reasons for this. Those include ambitious projections in the outlay not proportionate to reality in terms of revenue, and the govt ending up revising it downwards at the end.”GFXTarget and realityBudget estimate 2025-26Actuals till Jan 2026Revenue receiptsRs 2.9 lakh croreRs 2.2 lakh croreCapital expenditureRs 71,336 croreRs 32,847 croreRevenue expenditureRs 3.1 lakh croreRs 2.2 lakh croreSource: Finance deptFigures rounded off—-
