The laborious road ahead for D K Shivakumar on jobs, growth and welfare

From delivering welfare promises to scripting a Congress comeback in 2028, the new CM will have his hands full. Archis Mohan writes

Karnataka Congress President D K Shivakumar, who will take oath as the state’s next chief minister on June 3, will have 700 days to deal with major tasks like balancing welfare promises with fiscal responsibilities, delivering infrastructure development within and beyond Bengaluru, and maintaining Karnataka’s lead as India’s IT powerhouse as Andhra Pradesh snaps at its heels. 

But above all else, in the first half of 2028, he will be expected to perform a feat that Karnataka has not witnessed since 1985 — the return of an incumbent government. 

Over the past decade, Shivakumar has been the Congress’ troubleshooter. Whether it was ensuring the election of Ahmed Patel to the Rajya Sabha in 2017, supporting the Bharat Jodo Yatra in 2022 or helping Congress win the 2023 Assembly polls, the 64-year old has delivered, more often than not, when asked of him. 

Even now, political challenges for Shivakumar abound. These include the possibility of Union Minister and JD (S)’s H D Kumaraswamy returning to state politics to protect his Vokkaliga stronghold in south Karnataka. Shivakumar too belongs to the influential community. 

Another test for the new CM will be the retaining of the ‘Ahinda’ support base that his predecessor Siddaramaiah had built for the Congress over the years. Ahinda is a Kannada acronym for a socio-political coalition comprising minorities, backward classes and Dalits. “Much would depend on how Shivakumar crafts his council of ministers and gives representation to leaders from these sections,” a Congress leader said. Siddaramaiah’s son and MLC Yathindra accompanied his father to meet the Congress high command in Delhi on Friday, leading to speculation about his induction into the cabinet — this could neutralise the BJP’s criticism that the Congress has removed a backward classes leader as the CM. 

Shivakumar will also have to navigate Tamil Nadu’s opposition to the Mekedatu dam, which he has said will solve Bengaluru’s water woes.

 

Talking money 

Despite the pressure on the state’s finances because of the Congress delivering on its election promises of five welfare schemes, Siddaramaiah has left Karnataka’s economy in a healthy condition. Its gross state domestic product (GSDP) for 2026-27 (at current prices) is projected to be ₹33.05 trillion, amounting to a growth of 7 per cent over FY26. Expenditure (excluding debt repayment) in FY27 is estimated to be ₹4.12 trillion, an increase of 12 per cent year-on-year (Y-o-Y). Receipts (excluding borrowings) for FY27 are estimated to be ₹3.15 trillion, an increase of 14 per cent over the revised estimate for FY26. Revenue deficit in FY27 is estimated to be 0.7 per cent of GSDP down from 0.8 per cent in FY26 according to revised estimates. Fiscal deficit for FY27 is targeted at 2.9 per cent of GSDP (₹97,448 crore). In FY26, as per the revised estimates, the fiscal deficit is expected to be 3 per cent of GSDP, marginally higher than budgeted. At the end of FY27, Karnataka’s outstanding liabilities are estimated to be 25 per cent of GSDP, about the same as the revised estimate for FY26, and within a reasonable limit. 

In 2023, Karnataka launched five welfare schemes, and the spending on these is estimated to be ₹51,286 crore in FY27, which is 12 per cent of the total expenditure (excluding debt repayment). In FY26, ₹51,034 crore (14 per cent of the total expenditure) is estimated to be spent on these schemes. The Comptroller and Auditor General (CAG) noted in 2025 that implementation of these guarantee schemes increased revenue expenditure and revenue deficit. Fiscal deficit has also increased to 2.97 per cent of GSDP in FY25. The CAG observed that in FY24, a higher allocation towards these schemes reduced spending on infrastructure by ₹5,229 crore compared to the previous year.

 

Balancing act 

The Karnataka Economic Survey 2025-26 has flagged regional disparity in the state. The services sector contributes about 70 per cent to the GSDP — Bengaluru’s urban areas have a high per capita income, which drops by almost 50 per cent in the state’s non-urban areas, with the Kalaburagi region reporting the lowest per capita income. In FY27, ₹3,000 crore has been allocated towards the Kalyana Karnataka Region Development Plan, which is concerned with Bidar, Kalaburagi, Yadagiri, Raichur, Koppal, Bellary and Vijayanagara districts. 

In his message for Shivakumar, Siddaramaiah said that Karnataka has also become a model when it comes to equitable distribution of wealth, power, and opportunities, and that other states have emulated its schemes.

“In a situation where the entire country is gripped by fear due to economic insecurity, the people of the state too are anxious about the future,” he said.