Karnataka’s 2025 Budget Focus on Affordable Housing & Infrastructure

Karnataka e state budget for 2025-26, outlines a vision for fiscal discipline alongside significant investments in infrastructure and economic growth. The estimated expenditure for the year is Rs 4.09 lakh crore, focusing on key areas like affordable housing and Bengaluru’s infrastructure.

A major budget highlight was the increased allocation for infrastructure development in Bengaluru, which saw its funding jump from Rs 3,000 crore to Rs 7,000 crore. Siddaramaiah also revealed plans for an interest subvention scheme to reduce the financial burden on beneficiaries of the Affordable Housing Project, supported by the Rajiv Gandhi Housing Corporation. As part of this initiative, the state government will contribute Rs 5 lakh for beneficiaries under the Pradhan Mantri Awas Yojana (Urban), while the beneficiaries' contribution has been reduced to Rs 1 lakh.

The Karnataka Slum Development Board has already approved the construction of over 1.8 lakh houses, with nearly half of them completed. Additionally, the Karnataka Housing Board plans to develop 16,140 plots in the Suryanagar Phase-IV Scheme in Bengaluru’s Anekal taluk, distributed to landowners and the public at affordable rates. To streamline property management, the CM announced that details of all registered housing cooperative societies in the state will be made accessible online.

The Bruhat Bengaluru Mahanagara Palike (BBMP) has implemented reforms such as the e-Khata system to improve Bengaluru's municipal services, significantly boosting property tax collection. These reforms have resulted in an additional Rs 4,556 crore in revenue for the city. The BBMP will receive a special grant of Rs 7,000 crore for the coming fiscal year, a substantial increase of Rs 4,000 crore.

Bengaluru’s infrastructure will also benefit from the ‘Brand Bengaluru’ initiative, with Rs 1,800 crore allocated for 21 schemes to enhance the city's global appeal. This includes efforts to reduce congestion by developing second and third-tier cities and rejuvenating key lakes in the region.

The government has committed Rs 3,000 crore for flood mitigation measures to address the rising flood risks, including a Rs 2,000 crore allocation for the BBMP area. Additionally, the budget includes funding for a 40.5 km double-decker flyover and the Namma Metro Phase-3 project, designed to ease traffic and improve mobility across the city.