Bengaluru Budget 2026-27: State to Decide Capital Grants for Five Corporations, Formula vs Ad-hoc Allocation in Focus
January 4, 2026
The 2026-27 Bengaluru State Budget, likely arriving in mid-February, will mark the first after the city’s governance changed. A major question is how the State government will split capital grants among the five Bengaluru city corporations. The five bodies have uneven income, with East Corporation expecting ₹912 crore and North Corporation ₹543 crore. The government says it will grant more funds to weaker corporations to level the field. However, the exact basis for this is unclear beyond the aim to aid corporations with lower revenue. A senior official revealed allocations will be “need based,” considering projects that are pending, ongoing, or planned. Earlier, the Brand Bengaluru Committee suggested a Finance Advisory Committee to help allocate funds fairly, but this was removed from the final governance law passed in 2024. Experts like Srikanth Vishwanathan of Janaagraha argue that a random, data-light approach will fail. He said, “A discretionary process, neither anchored in data nor in the voice of citizens, would be self-defeating. The GBA should put in place a basic scaffolding this year itself.” Other voices want a share of local taxes like GST and Motor Vehicle Tax to be given to city bodies through a clear formula. Activist N.S. Mukunda called for a ward-level index to guide fund allocation both between and inside the corporations. He warned, “If political parties clash between State and city corporations, allegations of bias will arise, hurting the city’s progress.” The Bengaluru NavaNirmana Party also pushed for a transparent, expert-led formula to decide the grants, as said by Srikanth Narasimhan: “We need a formula-based allocation, an independent commission of experts to arrive at the formula and for the entire process to be transparent.” The upcoming Budget and civic polls will test how Bengaluru balances power, money, and fairness among its five city corporations.
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Tags:
Bengaluru Budget
State Government Grants
City corporations
Fund Allocation
Formula-Based Funding
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