Karnataka Budget 2026: Bengaluru infrastructure, AI learning in focus

In a three-hour Karnataka Budget 2026 speech, 77-year-old CM Siddaramaiah touched upon various sectors in the state, with AI and infrastructure being the running themes. 

Here are the major announcements:

• Karnataka has banned social media access for children under 16
• Mysuru will be Karnataka's second IT capital
• Karnataka government has proposed building a second international airport in Bengaluru
• Karnataka CM Siddaramaiah said the State Budget's size has grown by 10% to ₹4.49 lakh crore
• ₹1,700 crore for white-topping roads in Bengaluru
• Five corporations under the Greater Bengaluru Authority will get ₹1,225 crore for infrastructure development
• 15 new courses in AI, ML, cloud computing, and automation engineering in select government colleges
• 'Science City' at a cost of ₹233 crore near Bengaluru proposed
• Modern software system with a dashboard to identify and effectively manage incident black spots
• Modern AI Data Labs with a grant of ₹10 crore in 50 government colleges in tier-2 and tier-3 cities
• CM proposed ₹20 crore to launch incubation centres for startups
• Bangalore Robotics and Artificial Intelligence Innovation Zone will be set up in collaboration with ISRO and KEONICS
• 500 new GCCs by 2029
• Drone testing facility centre in Chikkaballapur district
• ₹4 crore to design advanced surgical assistive robots
• ₹10 crore will be provided for the implementation of the first phase of the Karnataka Quantum Roadmap
• Karnataka government will strengthen policing infrastructure and technology across the state

An AI-based facial recognition attendance system will be implemented in all Anganwadis, schools, colleges, and hostels.

Under the Centrally Sponsored Police Modernisation Scheme, the Karnataka government will strengthen policing infrastructure and technology across the state.

The plan aims to equip the police department with advanced communication devices, forensic equipment, CCTV systems, body-worn cameras, drones, and anti-drone systems.

The chief minister allocated a budget of ₹354 crore for this initiative.

"The delay in payment of the profit margin for the distribution of food grains will be eliminated through the FIST Application," CM Siddaramaiah said.

The businessmen will be provided with a helpline and a voice chatbot based on AI.

Also, the property registration system will move to 'Kaveri 3.0', using AI to enable paperless registration at a cost of Rs 65 crore.

"For the next five years, a grant of ₹10 crore will be provided for the implementation of the first phase of the Karnataka Quantum Roadmap to prepare researchers and technicians to meet the high-quality human resources required in the quantum sector in the coming years," CM Siddaramaiah announced while presenting the State Budget 2026.

The Karnataka government has allocated ₹4 crore to design advanced surgical assistive robots in partnership with IIIT Bangalore and NIMHANS organisation to complement effective neurosurgical treatment.

"Facilities will be provided at a total cost of ₹20 crore to accommodate the newly established Institute of Advanced Genomics for genome editing, gene therapy, and other biotechnology-based laboratories," CM Siddaramaiah added.

The state government will also establish a state-of-the-art Artificial Intelligence Center of Excellence in Bengaluru. Moreover, two Centres of Excellence will be established in partnership with the Institute of Bioinformatics and the Applied Biotechnology Center for Cellular and Molecular Platforms and NASSCOM at a total cost of ₹16 crore.

The state government intends to establish a drone testing facility centre in Chikkaballapur district to support the testing and performance evaluation of drones.

Siddaramaiah said the state is targeting to establish 500 new GCCs by 2029, which will provide employment to 3.5 lakh people and generate an economic output of about $50 billion.

An IT park will be developed in Mangaluru through KEONICS to promote GCCs. 

The proposal comes as 41–50% of new GCC setups are moving to Hyderabad.

A robotics and artificial intelligence campus called Bangalore Robotics and Artificial Intelligence Innovation Zone will be set up in collaboration with ISRO and KEONICS, and an Artificial Intelligence and Robotics Technology Park under the Indian Institute of Science, the chief minister announced.

Moreover, IIIT Raichur will set up an Artificial Intelligence Excellence Center in Raichur at a cost of Rs 5 crore.

Karnataka will implement the Super 100 Industry Academy Adoption Program in collaboration with KDEM to increase employment through long-term industry-education partnerships.

Accelerator programmes for startups will be organised through K Combinator.

Karnataka Chief Minister Siddaramaiah proposed setting up an aerospace park near Mysore Airport to promote aerospace industries in Mysuru.

The project will be undertaken by the Karnataka Industrial Areas Development Board.

In the state Budget, CM proposed ₹20 crore to launch incubation centres for startups.

These incubation centres will be established in collaboration with IIM B, University of New South Wales, Australia, and Indian Institute of Science.

The incubation centres are aimed at promoting innovation in the renewable energy sector.

The CM has proposed establishing modern AI Data Labs with a grant of ₹10 crore in 50 government colleges in tier-2 and tier-3 cities. 

The initiative will be implemented in collaboration with the IndiaAI Mission. 

The aim is to make rural youth employable by providing them with the necessary skills.

Karnataka CM has proposed a modern software system with a dashboard to identify and effectively manage incident black spots across the state.

The dashboard will be developed at a cost of ₹25 crore in collaboration with IIT Madras and NIC.

CM Siddaramaiah announced that the Revised Master Plan 2041 (RMP) for Bengaluru will be implemented by the end of 2027. Additionally, a Comprehensive Mobility Plan (CMP) will be prepared within six months.

This comes after a decade of delay to implement a new master plan to promote critical urban growth and manage land use.

Karnataka CM Siddaramaiah announced to implement K-QUEST” (Karnataka – Quality Upgradation for Employment and Skills Transformation) Project over a period of five years in partnership with ADB at a total cost of ₹1,386 crore. 

The main objective is to improve the infrastructure and training standards in Government Industrial Training Institutes (ITIs), KGTTIs, KSDA, and JTSs in the State.

Karnataka CM Siddaramiah, while presenting the State Budget 2026, said the state government has proposed to the central government to set up a 'Science City' at a cost of ₹233 crore near Bengaluru.

Siddaramaiah proposed providing incubation facilities to entrepreneurs in the tier-2 and tier-3 cities of the state like Hubballi, Kalaburagi, Hosakote and Mysuru. 

Moreover, LEAP labs will be set up by KEONICS.

Last year, the Government of Karnataka’s Department of Electronics, IT and Biotechnology has unveiled the Local Economy Accelerator Programme (LEAP), a five-year initiative with an outlay of ₹1,000 crore aimed at strengthening the state’s innovation ecosystem.

Karnataka government has proposed building a second international airport in Bengaluru, for which a feasibility report will be prepared after consulting the Airports Authority of India. 

The state has also allocated ₹1,593 crore to develop seven domestic airports, with ₹200 crore earmarked for the current year. 

Additionally, flight training schools will be established in Vijayapura and Shivamogga to strengthen aviation training infrastructure.

"To enhance their technical skills, 250 engineering graduates from backward classes will be provided loans of ₹2 lakh each by D Devaraj Urs Backward Classes Development Corporation to undergo Artificial Intelligence training at NITs, IITs, and IIMs," Karnataka CM Siddaramaiah proposed.

Karnataka CM Siddaramaiah proposed an allocation of ₹2,500 crore to strengthen government first-grade colleges, establish centres of excellence, and increase research capacity with the support of Asian Development Bank.

The Karnataka Higher Education Transformation Project will see 40 government colleges, 11 polytechnics, and nine excellence centres established with ADB support to encourage entrepreneurship and a startup culture among students.

Karnataka CM Siddaramaiah said the five corporations recently established under the Greater Bengaluru Authority will get ₹1,225 crore for infrastructure development.

This comes after he allocated ₹1,700 crore for white-topping roads spanning 158 km in Bengaluru.

"Fifteen new courses will be launched in 11 government polytechnics and Chitradurga Government Science College, including courses that are currently in high demand and have job opportunities, such as Artificial Intelligence, Machine Learning, Cloud Computing, Automation Engineering, etc," the Karnataka CM said while presenting the State Budget.

CM Siddaramaiah proposed integrating AI in a self-learning digital tutor facility.

"In collaboration with IIT Dharwad, around 12.828 lakh students studying from class 8 to 12 will be provided with a personalised self-learning digital tutor facility by adopting Artificial Intelligence technology in the learning process at an estimated cost of ₹ 5 crore," the chief minister announced.

Karnataka CM Siddaramiah announced that Mysuru will be Karnataka's second IT capital, doubling down on the Beyond Bengaluru initiative.

"A decision has been made to develop Mysuru as the state's second IT city. This move aims to reduce congestion in Bengaluru," he said while presenting the Budget.

Karnataka has banned social media access for children under 16, CM Siddaramaiah announced.

The state is the first in India to propose such a ban.

It follows global precedents set by countries like Australia and France, which banned social media for children, given the rise in mental health issues and to tackle social media addiction.

The CM had earlier reportedly initiated consultations with vice chancellors of universities to understand their concerns and to assess the impact of such a ban.

CM Siddaramaiah allocated ₹1,700 crore for white-topping in Bengaluru. White-topping works for 158 km of roads have been announced.

Last year, the state budgeted ₹660 crore for arterial road upgrades spanning 460 km.

Karnataka CM Siddaramaiah proposed a call centre to help farmers in the state with information regarding weather and market updates.

"To provide farmers with weather, market, agricultural technology and departmental information under one roof quickly, the call center will be upgraded with Artificial Intelligence technology," he said.

Karnataka CM Siddaramaiah said the State Budget's size has grown by 10% to ₹4.49 lakh crore.

He has proposed ₹55,319 crore to boost development efforts.

Siddaramaiah also proposed ₹35,188 crore to enhance women's workforce participation.

Karnataka CM Siddaramaiah said he is presenting the Budget keeping AI innovation and developments in mind. 

"Karnataka is playing a unique role in the national and international trade arena. Global production methods are changing day by day due to revolutionary developments in Artificial Intelligence," he said.

"The developments in science and technology are crucial factors that determine the state of affairs. In this context, I am presenting this Budget with the awareness that we need to move forward with the determination to light the fire," the CM added while presenting Budget 2026.

While presenting Budget 2026, Karnataka CM Siddaramaiah said startups are attracting global investment and talent in the fields of electronics and aerospace. 

He also talked about the Beyond Bengaluru initiative.

"Beyond Bangalore is attracting more capital for the concept. The new industrial policy formulated by the state will enable development in two or three cities," he said in the legislative assembly.

Big Tech firms, including Microsoft, Google and Amazon, have announced multi-billion-dollar investments to build data centres in India. But in all three cases, Karnataka is notably missing from their expansion plans.

Earlier, Karnataka felt the loss when Google announced a $15 billion AI data-centre project in Visakhapatnam. 

The IT capital did not secure any comparable hyperscale projects in 2025. The Google and AWS commitments in neighbouring states are significantly larger than any recent announcements made in Karnataka.

Mohan Das Pai, former CFO and board member at Infosys, remains optimistic about Karnataka’s potential. “Karnataka has to define the areas it wants to dominate, like AI, quantum computing, semiconductors, and biotechnology,” he had told AIM.

The state allocated ₹300 crore for a Fund-of-Funds and a corpus fund of ₹100 crore for deep tech development, while also setting aside ₹50 crore over five years for the Centre for Applied AI for Tech Solutions (CATS). 

The government pushed the startup ecosystem to expand further in cities like Mysuru, Mangaluru, Hubballi-Dharwad, and Kalburgi, with 10,000 job creations.

Additionally, under the ‘Brand Bengaluru’ concept (to improve infrastructure, service delivery, and traffic management), ₹1,800 crore was allotted for 21 schemes during the financial year 2025-26.

In 2025, CM Siddaramiah presented a ₹4 lakh crore Budget.

The State Budget announced a Special Purpose Vehicle for the implementation of big infrastructure projects in Bengaluru. The yearly grant to Bengaluru was enhanced to ₹7,000 crore.

He proposed that a network of 300 km of additional roads would be constructed at a cost of ₹3,000 crore, utilising canal buffer zones.

₹3,000 crore was allocated to address weather-related challenges and enhance the city’s drainage and sewage treatment infrastructure.

The state floated its own OTT to help develop Kannada language programmes.

Welcome to the blog. At AIM, we will cover all the developments and announcements in the Karnataka Budget.

This will be Chief Minister Siddaramaiah's record 17th Budget. He also holds the Finance portfolio.