Chief Minister Siddaramaiah's new budget is all about boosting rural areas. He has slammed the Centre for scrapping the NREGA scheme and announced big plans, like renaming all gram panchayats, a new solar project called 'Ananta', and two major road development schemes.
Chief Minister Siddaramaiah has just presented the 2026-27 Karnataka budget, and it's clear his focus is on rural development and giving more power to local bodies. He came down heavily on the Central government for scrapping the NREGA scheme and announced a bunch of new projects for the state's villages.
NREGA Scrapped, State Warns of Legal Fight
The CM pointed out that the UPA government's Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) had created 182 crore person-days of employment in Karnataka. He slammed the Centre for replacing it with a new scheme called 'VB-G-RAM-G', saying it goes against Gandhi's idea of 'Gram Swaraj'. Siddaramaiah alleged that this new system is just a backdoor for contractors and takes away the rights of rural workers. He even warned that the state government is ready to take the fight to the Supreme Court to protect workers' rights.
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A Historic Renaming: Mahatma Gandhi Gram Panchayat
In a historic move, the CM announced that all gram panchayats in the state will now be renamed ‘Mahatma Gandhi Gram Panchayat’. This is a major highlight of the budget, done to honour Mahatma Gandhi's vision of 'Gram Swaraj' or village self-rule.
More Money for Panchayats
Panchayats are also getting a financial boost. Following the 5th State Finance Commission's advice, the state is increasing the share of its Net Own Revenue Receipts (NLNORR) for local bodies from 48% to 50%. Out of this, 35% will go directly to Panchayati Raj institutions, giving them more money for development work.
'Ananta' Scheme: Solar Power for Villages
To help gram panchayats become self-sufficient and cut down on massive electricity bills, a new project called ‘Ananta’ has been announced. Under this scheme, solar micro-grids will be set up in a public-private partnership (PPP) model. The target is to generate 4,000 MW of power annually, making panchayats financially stable when it comes to paying electricity charges.
Better Roads with Kalyana Patha and Pragati Patha
The government is also launching two massive projects to improve rural connectivity:
Kalyana Patha: A budget of ₹1,000 crore has been set aside to build 1,125 km of roads in the Kalyana Karnataka region.
Pragati Patha: With help from the Asian Development Bank (ADB), the government will spend ₹5,190 crore to develop 7,110 km of rural roads. For this year, ₹500 crore has been allocated.
Jal Jeevan Mission and Centre's Pending Dues
The CM also expressed his disappointment with the Centre over the Jal Jeevan Mission, which provides drinking water. He said the Central government is yet to release its share of ₹19,102 crore. Despite this funding gap, the state has allocated ₹10,433 crore in the budget to ensure the project doesn't stop.
LEAP for Local Economic Growth
To help gram panchayats earn their own income, a new ‘Local Economic Asset Augmentation Programme’ (LEAP) is being launched. As a pilot, ₹25 crore will be given to 25 panchayats to set up revenue-generating units. The budget also provides ₹30 crore for the maintenance of overhead water tanks (OHTs) and a ₹125 crore scheme to supply water to 23 villages in Koppal district's Yelburga-Kuknoor taluks.
Also read: Karnataka Budget 2026: Major Overhaul with 15,000 Teaching Jobs and 800 New Schools
