Karnataka seeks GST revenue protection, more tobacco excise duty sharing from Centre

The Karnataka government has called on the Union Government, in the forthcoming Union Budget 2026-27, to ensure revenue protection for States post-GST rationalisation, share excise duty and cess on pan masala and tobacco products, release pending Central dues under flagship schemes such as the Jal Jeevan Mission, and strengthen funding for rural employment, agriculture, and social protection.

- AGENCIES

The State government made these demands during the pre-Budget consultations chaired by Union Finance Minister Nirmala Sitharaman in New Delhi on Saturday.

Karnataka’s Revenue Minister Krishna Byre Gowda represented his state at the meeting with the Union finance minister.

As is the convention, the Budget for 2026-27 will be presented on February 1.

Presenting the State’s views, the Karnataka Minister highlighted that while it remains a major contributor to national economic growth, its fiscal space has significantly narrowed due to GST rate rationalisation, rising social sector commitments, climate-related shocks, and rapid urbanisation. The State underlined that responsibilities of States have expanded faster than their revenue base.