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Karnataka’s Fiscal Reform
February 10 , 2026
11 hrs 0 min
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- The World Bank highlighted Karnataka’s 2014 fiscal reform as a model for other Indian states.
- Karnataka included borrowings of Public Sector Undertakings (PSUs) and Special Purpose Vehicles (SPVs) in state liabilities.
- The move improved fiscal transparency, reduced off-budget borrowing, and strengthened budgetary discipline.
- Off-budget borrowing is a concern as it hides true debt and weakens fiscal control in many states.
- It recommended a standardised reporting framework for off-budget borrowing, to be enforced by the Comptroller and Auditor General (CAG) of India.
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